Seminar ID: 111257

Force Majeure Clauses in Purchase Agreements

Force Majeure Clauses in Purchase Agreements

Force majeure clauses – does your agreement need one?

Parties should not assume that they always need a force majeure clause. Sometimes, these clauses don’t add anything to what the law already provides, and they can actually take away rights that parties get automatically. Without such a clause, contracting parties automatically get the benefit of two related gap-filler doctrines that can excuse a party's obligations when an unanticipated, supervening event fundamentally alters the nature of the parties' contract: impossibility, or as it is commonly called nowadays, impracticability, and frustration of purpose. This white paper reviews gap-filler doctrines and discusses tips for drafting force majeure clauses.