Force Majeure

Force majeure is a force against which you cannot act or fight.

Every contract has a force majeure clause. It usually includes natural disasters such as an earthquake, flood, fire, etc. It can also list such contingencies as war, embargo, sanctions. Along with this there are some other circumstances beyond the Sellers' control. The Seller may find himself in a situation when he can't fulfil his obligation under the Contract. It may happen if there is a general strike in the country, a strike of coal-miners, transport workers etc. Production may be suspended if there is a shor­tage of the energy supply. When negotiating a contract a list of contingencies must be agreed on and put into the Contract.

In case of a contingency the Seller must notify the Buyers of a force majeure. The Seller is to notify the Buyer of a contingency right away. If it's done in due time the Buyer may take immediate action to protect his interest.

A force majeure must be a proven fact. The Seller is to submit to the Buyer a written confirmation issued by the Chamber of Commerce to this effect. The certificate testifies that a contin­gency really took place. It describes its nature and confirms its duration.

In a dispute between the Buyer and the Seller not only the fact of a contingency is to be ascertained. The Seller must have evidence that non-execution of a contract or its partial fulfillment is a direct result of a contingency. If it is proved the Seller is not liable and the execution of a contract is postponed until all the after-effects causing damage are eliminated. A natural disas­ter may last only a few minutes but it'll take a lot of time to recover the loss.

Assignments

I. Memorise the following words and phrases:

II. Answer the questions:

1. What is the definition of force majeure?

2. What contingencies are listed in a force majeure clause?

3. Why is it very important to notify the Buyer of a contingen­cy?

4. What document certifies the fact of a contingency?