Trends - Force majeure

In our first 'Trends' thought leadership piece, our international business lawyers provide clients with some latest insights on 'Force majeure'.

ENFORCEABILITY ISSUES

Force majeure events are usually defined as certain acts, events, or circumstances beyond the control of the parties, for example, natural disasters or the outbreak of war. Recently, however, clients have discovered, to their detriment, that ‘pandemic’ does not necessarily come under ‘force majeure’ in a commercial contract and
that court interpretations of enforceability vary wildly across the globe.

USE OF ARBITRATION

Clients are resorting more frequently to negotiation in courts of law and are specifically using arbitration to resolve disputes involving force majeure. It is therefore important to start negotiations now!

GROWING USE IN CONSTRUCTION SECTOR

Supply chain disruption and delay has caused price volatility in the materials market and has prompted many construction businesses to ask for the inclusion of force majeure clauses in their commercial contracts.

THE IMPORTANCE OF SPECIFICS

When a force majeure clause is added to a contract, detailed drafting of such clauses is essential so that the clause spells out the specific type of events and circumstances that the contracted parties would agree constitutes a force majeure.

PROTECTION AGAINST THE PREDICTABLE?

Force majeure is not always an Act of God –and many of the challenges that impact the conduct of a business are in fact foreseeable, and many are or will be caused in the future by global warming, which is foreseeable, and manmade. Therefore, it may become increasingly difficult for a lawyer to draft a contract that protects
a client against a catastrophe that could not have been foreseen. If you require support in this regard, a preliminary chat, or advice concerning your existing, current and future business relationships, please do not hesitate to contact our International Business Law Practice Group.

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AGA provides a cost-efficient legal service model whereby large and small companies can access support in protecting and growing their businesses in over 300 business centers in 95 countries worldwide. You can count on team members who adhere to common service standards that emphasise responsiveness, clear communication, transparency, and technical excellence. For assistance with all business law matters in any country, contact businesslaw@alliottglobal.com

About Alliott Global Alliance

Alliott Global Alliance is an international alliance of 215 independent law, accounting and specialist firms in over 95 countries around the world and our members are experts in the law, customs, and tax systems of almost any country where you are looking to do business. Our international business law experts can provide the services you require to help you with your critical and strategic business challenges including:

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