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Force Majeure Clause

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A force majeure clause is sometimes known as an “act of God clause.” So, it’s an event that occurred outside the control of the parties. The biggest example of force majeure clause in our lifetime is 9/11. So, nobody anticipated 9/11 would happen; air travel got shut down for an entire week. 

I had a client who had a vendor who was trapped in South Carolina, couldn’t get back up here; the project was delayed a week. That was a force majeure. And then, the whole project got delayed a week. There wasn’t – a penalty wasn’t imposed. It had, actually, in it a per diem penalty provision if the project wasn’t completed on time. Because of this – in this case, act of God, or everything outside our control – the court – we had a force majeure provision in there that allowed them to not enforce those provisions.

And they’re very common in all kinds of contracts – not only construction contracts, but even purchase and sale of equipment; all kinds of other contractual obligations – to deal with the unexpected.

Minneapolis business attorney Stephen Yoch of Felhaber Larson defines force majeure clause.

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