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Understanding Force Majeure

Clauses and Claims

The 2019 coronavirus disease (COVID-19) pandemic has stirred up more questions than answers. When it comes to force majeure clauses and claims, many business owners are consulting our attorneys for guidance. To help you understand how force majeure applies in your case, we will need to take a closer look at the contract in question. Luckily, Dean Law Firm offers free consultations where we help you explore your legal options. Call or click here to schedule yours today, and in the meantime, enjoy these insights from the legal industry, the insurance industry, and around the web!

What Is Force Majeure?

Force majeure is French for “greater force,” and is a concept we borrowed from French law. In the United States, however, we primarily use force majeure in contracts. If your contract has a force majeure clause, it means you may be excused from fulfilling your end of the agreement if an unforeseeable and unavoidable event prevents you from doing so.

Most contracts list a number of circumstances that could trigger force majeure, including:

  • Hurricanes
  • Floods
  • Other natural disasters or “acts of God”
  • War
  • Terrorism
  • Strikes
  • Government orders
  • Other “acts of man”

The majority of force majeure clauses also have a “catch-all” category that covers “any [other/similar] cause outside the control of a party.” That being said, many force majeure clauses are also vague and do not address situations like pandemics or infectious diseases explicitly.

As such, the parties of the contract (and their legal counsel) will have to work together to decide whether COVID-19 counts as an “act of God,” stay-at-home orders count as an “act of man,” or force majeure fails to apply at all.

Was the COVID-19 Pandemic Foreseeable?

With previous outbreaks like SARS, swine flu, and bird flu, many argue that the COVID-19 crisis was foreseeable. This is especially true for business interruption insurance policies that wrote in “infectious disease exclusions” and sold special coverage for pandemics, in particular.

For some other businesses, like shops and restaurants, though, the scope of this crisis is truly unprecedented, and could therefore be interpreted as unforeseeable.

Ultimately, any claim you make or contest will depend on the language of your contract, which is why we need to look at it to make your situation clearer.

Please take advantage of a free consultation with our firm!

Simply call us at (281) 280-8900 or contact our attorneys online to get started.