Terms and Conditions, everyone has seen them, but hardly any of us have to rely on them until something has gone wrong!
Every established business or company should have a strong set of Terms and Conditions in use for their client base or trading partners. It is the bedrock of most modern day business contracts. But what if you enter a contract and you can no longer meet your obligations in that contract, through no fault of your own?
Force Majeure is a term that essentially means ‘unforeseeable circumstances that prevent someone from fulfilling a contract’. It is a clause frequently found in Terms and Conditions, with some common examples of this including floods or earthquakes, war or even changes in the law. If any of these examples happened, then a party would not be held liable for a breach of contract if they could not meet their obligations.
But what if a party claimed they could not meet their contractual obligations due to a flood, but that flood was actually caused by somebody leaving a tap running? There would be a strong argument that those circumstances could be foreseen! On the other side of the coin, what if your business relied heavily on computers and then suddenly your systems were hacked, despite having software protection, leaving you unable to meet a contractual deadline. Could it be said that this was an unforeseen circumstance out of your control?
“Standard” force majeure provisions can be modified to address your particular business risks.
If you own or operate a business or company, it is critical that you understand the importance of having a strong set of Terms and Conditions that are regularly updated, in line with changes to the law and to your circumstances. Clauses such as Force Majeure, may just be the protection that your business needs, without you knowing it yet.
Contact: Graeme Champion if you need your Terms and Conditions (including your Force Majeure clause) updating.