Force majeure clauses are a standard part of contracts in Georgia. The clauses allow businesses to suspend or cancel a contract if a force majeure event happens. This term refers to any unforeseen event that prevents either party from fulfilling their obligations under the contract. These events can be anything from natural disasters to labor disputes. In many cases, they’re beyond the control of the party that was supposed to be able to handle them.
What is a force majeure clause?
This is a clause within a contract that excuses a party from fulfilling their obligations under the contract because of an external event beyond their control.
In business litigation, the party invoking the force majeure clause must prove that the event was beyond their control and prevented them from performing their contractual obligations. The party unable to perform due to the event is responsible for fulfilling any missed obligations, even if they were not at fault for causing the clause-triggering event.
These clauses often come into play during crises, when businesses cannot make timely deliveries or pay bills on time. Companies may be able to justify not fulfilling certain contractual obligations as being due to a force majeure event.
Including a force majeure clause
There are a few things to address when drafting this type of clause. The first is the definition of force majeure. This can vary depending on the jurisdiction, but typically it refers to an act of God, war, invasion, insurrection, or other extraordinary circumstance that is out of the control of either party.
The second thing to consider is how long the force majeure will last. Often it will be temporary, lasting for a specific period. However, suppose the condition persists for longer than expected. In that case, the parties may need to agree on actions to restore continuity in the contract.
If you’re faced with a situation where you can’t meet your contractual obligations because of a force majeure event, keep these tips in mind: Identify what caused the event and determine if it’s something you could have prevented; work with your counterpart to find a resolution, and document everything so there’s no doubt about who is responsible if things go wrong.