Force Majeure is a legal term derived from the French language, which literally means "superior force." Also known as Act of God, it refers to an event or circumstance beyond human control that makes it impossible, illegal, or commercially impracticable to fulfill a contractual obligation. It is a standard clause found in most commercial contracts and is activated in the event of unforeseeable and uncontrollable circumstances that prevent a party from fulfilling its contractual obligations.
In the industry, Force Majeure is used to protect businesses from unforeseen risks that are beyond their control. Natural disasters, epidemics, wars, revolutions, political sanctions, and other similar events fall under the purview of Force Majeure. It provides legal protection to businesses against claims of breach of contract and liability for damages.
The invocation of a Force Majeure clause empowers the affected party to suspend or terminate the contract without being held liable for breach of contract. It also relieves them of any obligation to perform the contract if the event or circumstance makes performance impossible or impracticable.
In the current COVID-19 pandemic crisis, Force Majeure provisions are being invoked by businesses that are unable to fulfill their contractual obligations due to the lockdown restrictions and supply chain disruption. It is being used as a legal defense to protect businesses from liability claims and to minimize financial losses.
In summary, Force Majeure is a legal concept that provides protection to businesses against unforeseen risks that are beyond their control. It is a standard provision in commercial contracts and is used to relieve businesses of liability for non-performance of contractual obligations due to circumstances beyond their control.
Force Majeure
Economy Term
Force Majeure is a legal term derived from the French language, which literally means "superior force." Also known as Act of God, it refers to an event or circumstance beyond human control that makes it impossible, illegal, or commercially impracticable to fulfill a contractual obligation. It is a standard clause found in most commercial contracts and is activated in the event of unforeseeable and uncontrollable circumstances that prevent a party from fulfilling its contractual obligations.
In the industry, Force Majeure is used to protect businesses from unforeseen risks that are beyond their control. Natural disasters, epidemics, wars, revolutions, political sanctions, and other similar events fall under the purview of Force Majeure. It provides legal protection to businesses against claims of breach of contract and liability for damages.
The invocation of a Force Majeure clause empowers the affected party to suspend or terminate the contract without being held liable for breach of contract. It also relieves them of any obligation to perform the contract if the event or circumstance makes performance impossible or impracticable.
In the current COVID-19 pandemic crisis, Force Majeure provisions are being invoked by businesses that are unable to fulfill their contractual obligations due to the lockdown restrictions and supply chain disruption. It is being used as a legal defense to protect businesses from liability claims and to minimize financial losses.
In summary, Force Majeure is a legal concept that provides protection to businesses against unforeseen risks that are beyond their control. It is a standard provision in commercial contracts and is used to relieve businesses of liability for non-performance of contractual obligations due to circumstances beyond their control.