The freezing of flights over the UK due to a large cloud of Icelandic volcanic ash means that many businesses cannot do what they are supposed to do. Especially if it involves flying from A to B to do X. But if your business is under contract to do X (whatever that may be), then who bears the costs of (and liability for) not doing it?
This is where a business should typically look to its force majeure clause in its contract. This is the clause that (if properly drafted) usually sets out the contractual rules and procedures for "events outside the control of the parties" or for "Acts of God" or some such.
A properly drafted force majeure clause should set out:
- what constitues an event of force majeure;
- how the parties agree to deal with it in terms of costs and liabilities;
- how time works (e.g. are obligations frozen, cancelled or pushed off?);
- a procedure for notifying each other; and
- whether any consequences follow (e.g. termination) if the event continues for too long.
Do you have a properly drafted clause?
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.