Chris Alviggi from NFP explains what you need to know
France, 1861. Two parties (event organiser-lessee and landlord) enter into a fixed price/day contract for a music hall rental, when an accidental fire destroys the venue. The contract did not contain a clause stipulating recourse due to unforeseen events. Parties sued and the courts ruled: ‘In contracts in which performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance.’ On this day, force majeure (FM) was born.
In the normal course of business, contracts are executed, and FM clauses are generally glossed over. Often, contracted parties do not fully vet FM on performance, indemnification, and insurance recovery. This article delves into the implications of FM clauses in the context of tankage agreements, brownfields, and environmental health and safety (EHS) initiatives.