Planning for the Unexpected With a Force Majeure Clause Part 1
Construction contracts require contractors to perform work until the project is complete, or else, face liability or project termination. In the wake of hurricane season, our Orlando construction attorneys want contractors to understand the impact that an unexpected event can have on their ability to perform. Events such as hurricanes, wildfires, and floods are becoming more common and can cause damage to a worksite to the extent that pricing and time can be greatly affected. This article and part two will help contractors prepare for the unexpected with a force majeure clause.
What Is a Force Majeure Clause
A force majeure clause is a way to deal with the effects of unforeseeable and uncontrollable events. This provision removes liability and dictates what happens to performance under the contract if a natural catastrophe interrupts the expected project timeline thereby restricting workers from fulfilling their contractual obligations.
Typical Force Majeure Events
The most common force majeure events are earthquakes, hurricanes, tornados, floods, and wildfires. Certain man-made events may also be considered as force majeure events. These events include civil or military disturbances, terrorism, explosions, strikes, and scarcity of energy supplies. Anything that cannot be anticipated while drafting the contract and factors that could impede progress should be negotiated between the parties.
Who Bears the Risk If There Is No Clause?
Without a force majeure clause in place, the risk typically falls on the shoulders of the contractor who has to repair work caused by the event. Since force majeure events are generally considered “acts of God” both the owner and contractor share the risk. Both parties are left to the mercy of the common law doctrines of “impracticability” and “frustration of purpose.” Contractors must protect themselves at all cost and should seek the counsel of an experienced Orlando construction attorney to ensure that they exercise their right to a time extension through the doctrine of force majeure.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.