Force Majeure and Coronavirus

Force Majeure and other contractual clauses to be considered in your Terms of Business.  

If you need assistance with Terms of Business or any other commercial contract please contact a member of our Commercial team for more information – 01905 900919 or welcome@bradleyhayneslaw.co.uk.

There have been many disruptions to businesses recently, with Brexit, flooding and now the outbreak of the Coronavirus pandemic.  This has led to disputes or uncertainty where the supply of goods or services has been badly affected.  Consequently business owners are turning to their terms of business only to find that such issues have not been adequately covered.

It is important that businesses are fully aware of the terms within their commercial contracts, so that they know their rights and obligations when event outside their control occur and further that their liability is limited as far as it can be.

Force Majeure

A “force majeure” clause is usually included in commercial contracts to cover failure in contractual performance due to an event or occurrence outside of the Company’s control.

These clauses typically aim to suspend or extinguish a party’s duty to perform some or all of their obligations in specified emergency circumstances, therefore limiting their liability under the contract for non-performance.

A force majeure clause varies the usual position that a supplier is liable for reasonably foreseeable damages arising out of a breach of contract – so for example losses that arise for the customer due to a delay in the provision of services by the supplier.

Usually a force majeure clause is drafted to apply in cases of natural disaster, epidemic, strikes, changes in the law, adverse weather and other similar designated circumstance, including a failure of a third party, however these should be tailored with your business in mind.  Force majeure clauses need to be drafted carefully to be enforceable.

As we enter a period of severe uncertainty for businesses whilst lockdown measures slowly released, it is imperative that businesses ensure their clauses limiting liability, such as the force majeure clause are there, well drafted, and properly incorporated.   Businesses need to ensure that if they are unable to perform their contracts in the manner agreed in the future, due to events outside their control, that they are either not liable or their liability is controlled.

What we can do to help

If you already have terms of business and require a review, we would be happy to do so during a free 30-minute consultation and provide high level view on whether they can be improved or need replacing.  We can also draft terms of business from scratch.  All our commercial work of this type is undertaken on a fixed fee basis.

Further, if you or your business has been affected by a force majeure event, which has resulted in dispute or may do, then we can help with resolving the issue in a commercial and pragmatic manner.

If you would like us to review your Terms of Business or have any other commercial contract related query, please contact a member of our commercial team for more information – 01905 900919 or welcome@bradleyhayneslaw.co.uk.