The recent spate of storms that have devastated parts of England have caused many problems for businesses. Through no fault of your own maybe your customers have been let down or suppliers have let you down. What are your obligations? The answer lies in your contractual terms and a very important phrase called ‘Force Majeure’.
Force Majeure has no definition in English law and is a clause commonly found in commercial agreements. It states that one or both parties will not be liable for not meeting their obligations when an extraordinary event occurs. It’s a popular misconception that parties to a contract are automatically relieved from their obligations when some kind of disaster occurs. This clause is effectively a ‘get off the hook’ clause for you and your suppliers, if the reason for your failure to perform contractual obligations was beyond your control.
Commercial Solicitor, Matthew Fretten says,”This clause is normally discussed by the parties when a contract is being negotiated and must be correctly worded to be effective. If there is no Force Majeure clause in your contract you may be open to a claim for breach of contract from your supplier.” If you already have this clause in your contract you should check to see what situations are covered and what the consequences are – does the clause require the affected party to give immediate notice of the event or does it merely suspend obligations? Does it allow termination of the contract if the Force Majeure event is not resolved within a specified time?
Our Commercial team, based in Christchurch also cover Bournemouth, Poole and the New Forest. For a free initial chat, please call 01202 499255 and Matthew or a member of the team will be happy to discuss any questions that you may have.