What a force majeure clause does
A force majeure clause answers a hard question before it ever arises: if an event nobody could control prevents performance, who is excused, for how long, and on what terms. It converts a chaotic crisis into a set of pre-agreed rules.
Most clauses do four things:
- Define the triggering events, such as natural disasters, war, terrorism, epidemics, embargoes, or binding government orders.
- Set the causation standard, meaning how severely the event must interfere with performance (prevent, hinder, or merely delay).
- Prescribe the consequences: suspension of duties, extended deadlines, allocation of costs, and a right to terminate if the disruption lasts too long.
- Impose procedure: prompt written notice and a duty to mitigate and resume as soon as possible.
Two points are easy to miss. First, force majeure has no fixed statutory meaning in US common law; unlike the default doctrines of impossibility, impracticability, and frustration of purpose, its scope comes almost entirely from the words the parties write. Second, it is a shield, not a windfall. It excuses liability for nonperformance during the qualifying event, but it rarely erases money already owed, and it does not let a party walk away just because the deal turned unprofitable.
Drafting example
Force Majeure. Neither party shall be liable for any failure or delay in performing its obligations (other than payment obligations) to the extent caused by an event beyond its reasonable control, including acts of God, fire, flood, earthquake, epidemic or pandemic, war, terrorism, civil unrest, embargo, or a binding order of a governmental authority (each, a “Force Majeure Event”). The affected party shall (a) give written notice within ten (10) business days of becoming aware of the event, describing its nature and expected duration; (b) use commercially reasonable efforts to mitigate and resume performance; and (c) resume performance promptly once the event ends. If a Force Majeure Event continues for more than sixty (60) consecutive days, either party may terminate the affected order on written notice, without liability for the excused nonperformance.
Read the load-bearing words. The carve-out “(other than payment obligations)” keeps money owed enforceable. “To the extent” ties relief to actual causation rather than all-or-nothing. “Including” signals an illustrative, not exhaustive, list. The ten-day notice window, the mitigation duty, and the sixty-day termination backstop each turn a vague concept into an operable procedure. Every one of those choices is a negotiation lever, not boilerplate.
What US law says
Force majeure clauses are ordinary contract terms interpreted under state law, and the governing state can change the result. A few themes recur.
First, courts read the clause narrowly and hold parties to the events they actually listed. New York, whose law governs a large share of commercial agreements, is a leading example: a party can generally invoke only the enumerated events, and a catch-all such as “or any other cause beyond the party’s control” is limited by ejusdem generis to events of the same kind as those already named.
Second, foreseeability matters. If the risk was foreseeable when the parties signed, courts are reluctant to treat it as force majeure unless the clause plainly says so.
Third, the event must be the real cause of nonperformance, not merely a market shift that made performance more expensive. Economic hardship, rising input costs, and lost profits, standing alone, are generally not force majeure.
Fourth, when a contract has no force majeure clause, the party falls back on the common law and UCC defaults: impossibility, commercial impracticability under UCC Section 2-615 for the sale of goods, and frustration of purpose. Those doctrines are harder to satisfy than a well-drafted clause, which is exactly why the clause is worth negotiating rather than leaving to the defaults. This is general legal information, not legal advice.
Common mistakes to avoid
- A purely generic trigger. A clause that says only “events beyond reasonable control” invites a fight over what that phrase covers. Pair an enumerated list with a same-kind catch-all.
- Omitting pandemics and government orders. Many pre-2020 clauses never mentioned them, and “acts of God” does not clearly include a public-health lockdown. Name the events you actually worry about.
- No procedural spine. Without a defined notice period, form of notice, mitigation duty, and duration-based termination right, a party can claim force majeure late and dispute when its obligations paused.
- Leaving payment ambiguous. Buyers usually insist that money owed is never excused; most negotiated clauses carve payment obligations out of force majeure entirely.
- The wrong causation verb. “Prevents” is a high bar (performance must be impossible), while “hinders” or “delays” is far easier to trigger. Choose the verb on purpose, because it sets how much protection the clause gives.
- No duty to mitigate. A clause that lets a party sit idle invites disputes; require commercially reasonable efforts to work around the event and resume.
When it matters most
Force majeure clauses earn their keep in long-term supply and manufacturing agreements, logistics and construction contracts, commercial leases, and any deal with cross-border dependencies exposed to weather, geopolitics, or regulation. The longer the term and the more physical the performance, the more the exact wording is worth.
They matter at two moments above all. The first is at drafting, the only chance to define the events and consequences before a crisis, when neither side yet knows who will need the clause. The second is the instant an event hits, because notice deadlines and mitigation duties start running immediately; missing a ten-day notice window can forfeit the defense even when the underlying event plainly qualifies.
That second moment is an operations problem as much as a legal one. Knowing which of your agreements contain a force majeure clause, what each one covers, and what notice each one demands is impossible to do from memory across a portfolio. A CLM platform like Pactolane keeps every executed contract in a searchable repository, and PactAI can extract and surface the force majeure terms across your contract base, so that when a hurricane, strike, or government order lands, you can see in minutes which contracts are affected and by when each requires action. Renewal and deadline alerts help ensure a notice window is never missed, and a conversational AI chat over a contract lets you ask what a specific clause requires. Drafting the clause well is step one; managing it with disciplined contract management, the AI preparing and the human deciding, is what turns the words on the page into protection you can actually use.
Related clauses
Frequently asked questions
What is a force majeure clause?
A force majeure clause is a contract provision that excuses or suspends a party's obligations when an extraordinary event beyond its reasonable control prevents performance. It usually defines the qualifying events, the notice a party must give, and the consequences, such as suspended deadlines or a right to terminate. Because it has no fixed statutory meaning in US common law, the protection it offers depends almost entirely on how it is drafted.
Does force majeure cover a pandemic like COVID-19?
A pandemic is covered only if the clause reasonably reaches it, which is why explicit wording matters. Clauses that expressly list "epidemic," "pandemic," or "government order" are far stronger than those relying on "acts of God," which courts do not clearly read to include a public-health lockdown. After 2020, many parties added pandemic and quarantine language precisely to remove that ambiguity.
Are rising costs or economic hardship covered by force majeure?
Increased cost or a less profitable deal is generally not force majeure on its own. US courts usually require that the event actually prevent or seriously impede performance, not merely make it more expensive. Parties who want price or cost relief typically negotiate a separate hardship or price-adjustment clause instead of relying on force majeure.
What happens if a contract has no force majeure clause?
Without a clause, a party must fall back on common law and Uniform Commercial Code defaults such as impossibility, commercial impracticability, and frustration of purpose. These doctrines are generally harder to satisfy than a well-drafted clause and give the parties less control over the outcome. That gap is the main reason a tailored force majeure clause is worth negotiating rather than left to the defaults.
How much notice must a party give under a force majeure clause?
Notice is due within whatever window the clause specifies, commonly a fixed number of days after the party becomes aware of the event. Missing that deadline can forfeit the defense even when the underlying event plainly qualifies, so the notice duty is as important as the list of covered events. Good clauses also require the notice to describe the nature of the event and its expected duration.
Can a force majeure clause excuse payment obligations?
Most well-negotiated clauses expressly exclude payment obligations, so money already owed remains due even during a qualifying event. Buyers and lenders generally insist on this carve-out because a disruption to delivery is different from an inability to pay. If the clause is silent, whether payment is excused becomes a matter of interpretation under the governing law.