Force Majeure Clause

You might also like

Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 1

Force majeure refers to a clause that is included in contracts to remove liability for

natural and unavoidable catastrophes that interrupt the expected course of events and prevent
participants from fulfilling obligations. Force majeure clauses are contractual clauses which
alter parties' obligations and/or liabilities under a contract when an extraordinary event or
circumstance beyond their control prevents one or all of them from fulfilling those
obligations. It therefore differs from some other legal systems where force majeure is a
general legal concept and where courts may declare that a particular event, such as a
pandemic like Covid-19, is a force majeure event.

Force Majeure of the French word means things beyond the control of both parties
involved in a contract. In the agreements and contracts there is a Force Majeure clause which
lists events in this category such as epidemics or governmental actions or natural disasters
that prevent the parties involved in carrying out the contract. For a contract without a relevant
clause (which is not usually provided by lawyers or accredited bodies), then Force Majeure's
reasons cannot be used. Different Force Majeure clauses in each type of contract take
different FIDIC, PAM and JKR examples. FIDIC is inclusive in that both parties can add to
the list of events that can be classified as Force Majeure while PAM and JKR are exclusive in
that they cannot be added. The court does not arbitrarily admit that any event is a Force
Majeure. It is best for both parties to discuss and take the middle ground that benefits both.

In order to apply the Force Majeure clause where appropriate, the party must go
through all the procedures outlined such as giving notice to the other party and giving notice
of its effects and consequences. The party is also responsible for minimizing the impact of the
event. In the case of a sale process, the lawyer will enter the Force Majeure clause which at
present, the lawyer cannot work to continue the process so an extension of time is needed to
replace the lost time. In the case of a lease, there is no advantage to the tenant using the Force
Majeure's reason for not paying the rent. But that doesn't mean the landlord can evict a tenant
immediately. The whole process of evicting a tenant if it goes through the process takes at
least 3 months. In general, lawyers also recommend that both parties discuss in harmony to
obtain a good resolution with minimal impact. It doesn't matter if the original agreement has
a clause or not. The court process is the last option, please seek the advice of a qualified
lawyer.

From the discussion, it is clear that the force majeure clause is included in contracts to
remove liability for natural and unavoidable catastrophes that interrupt the project. In my
opinion that we can conclude that pandemic COVID19 is one of the force majeure event
where it can make the project delay and to avoid raise of cost and time extend than estimation
in the contract it is a must to apply extension of time (EoT). It is also had been guide in
clause of JKR, PAM, FIDIC, CIDB about the force majeure. Although expressly set forth in
the treaty, has great implications in the event of circumstances or events inherent in the force
majeure to the parties. It is also beneficial to the contractor (and extended to the contractor) to
extend the time without penalty (damages), and in addition to terminating the contract
without blaming any party. However, its use and scope of use must be examined in order to
meet the purpose of the clause.

You might also like