force ma*jeure\ n [F,
superior force] (1883) 1 : superior or irresistible force 2 : an event or
effect that cannot be reasonably anticipated or controlled; compare act of god.
The Situation: As we all huddle at home with our
families, not going to work or social events on pain of arrest, and listening
to the news reports of more victims and area deaths, are we currently experiencing
some kind of superior force that could not be reasonably anticipated or
controlled?
Welcome to the world of “Force
Majeure”.
What is Force Majeure? Force
Majeure is a legal buzzword, used to describe one of a variety of boilerplate
clauses that a thorough lawyer puts in every contract that he drafts. They are the clauses that no one every reads,
until there is an act of terrorism or earthquake or war or perhaps a pandemic,
and one or both of the parties are having difficulty honoring a particular
obligation under their contract. For
example, a landlord is obligated to get the leased space ready for a tenant –
but can’t get the carpet delivered, can’t get a contractor to perform the work,
isn’t even allowed to work in the work place.
Is the landlord in default under the lease? It may
depend on whether there is a force majeure clause in the lease. If the clause is there, it will likely say
that either party is excused from performing when they cannot do so by reasons
of force majeure. The operation of that
clause does not necessarily cancel the whole contract, unless of course the
event makes the whole contract unenforceable – such as all of the leases and
service contracts in the World Trade Tower buildings. Or the hotel room contracts in New Orleans
during Hurricane Katrina. In the cases
where the event is expected to be more temporary, than the clause can excuse
the timeliness of performance until the event that caused the lack of
performance has resolved. In the case of
the landlord, once the carpet can be delivered, and the labor force is free to
travel and work, then “game on” under the contract.
What if we disagree? Like all contract clauses, this one is just words on paper – and so if
the cause and effect are unclear, in the minds of one party or both, then the situation
only resolves itself when the parties agree on how to move forward, or when
they take the issue to a judge who then tells them what he thinks. The second way costs a lot more money than
the first way. In cases like we are
experiencing, it is better to work with your other contracting parties, and be
the epitome of the law’s “reasonable man”.
Because if a judge must some day decide who was reasonable in the situation,
you don’t want to be seen as the party who was hitting the other party over the
head with the legal boilerplate in your contract, while your other party was
home with their children or aged parents, dealing as best they could with everything
else that must be handled in an emergency.
That clause is not in my contract! And if
you have no “force majeure” clause in your contract? There are a variety of other legal doctrines
that will excuse performance in the hard cases, including impossibility of performance, commercial
impracticability, and frustration of purpose.
I can’t lease you space in a building that does not exist. I can’t install carpet in space that no
longer exists. I can’t come to your
workplace and perform contract obligations when the governor has declared a
state of emergency and requires me to quarantine at home. I can’t host your birthday celebration in my
restaurant because I have been ordered to close that night. The law does not require a party to do the impossible.
On the other hand, if you
can still perform your end of the bargain while at home – such as a lawyer, accountant,
engineer, web designer, or anyone that can still perform in front of a screen at
home rather than at a fixed location such as an office or retail store or warehouse
or in an airplane or on a train, then you cannot simply use the existence of a
public emergency to take the time off and ignore your contractual obligations. The game is still “on” for you.
Conclusions? If you have legal disputes
arising from the current pandemic, you are at some point going to be judged on
your behavior, whether in the court of public opinion or by a judge. If you are seen as trying to take advantage
of the situation, using power to benefit yourself at the expense of someone with
less power, putting money ahead of people, asking others to take risks in a
risky environment, you are unlikely to find a sympathetic ear. So in your dealings with your contracting
parties, do the “right thing”, whether because you live your life that way
anyway, or you simply want to avoid the adverse consequences. They will both get you to the right place.
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