Don't Get Snowed Under: Force Majeure Clauses

We're firmly in the swing of the festive season, which means bustling sales, exciting new agreements, and the unpredictable British weather (among other things!). While the Christmas spirit encourages optimism, as a business owner, you need to be prepared for the unexpected. This is where a force majeure clause comes in. It sounds fancy and complicated, but it's a vital concept that protects your business when things go seriously wrong through no fault of your own. So, let's unwrap what force majeure means and why it matters.

Getting force majeure right is about managing risk and protecting your bottom line

1. What Exactly is Force Majeure?

In simple terms, a force majeure clause is a contractual term that allows one or both parties to be excused from fulfilling their contract obligations (or to suspend them temporarily) if an extraordinary event occurs that is beyond their reasonable control and makes performance impossible or impracticable. Think of it as a legal 'panic button' for genuine disasters. Crucially, a force majeure clause is not automatically implied into a contract. You only benefit from it if you specifically include the clause in your contract and it covers the event that has occurred.

2. What Events Can Be Covered?

The list of events that can be covered depends entirely on how the force majeure clause is drafted in your specific contract. Standard force majeure clauses often cover things like:

• "Acts of God" such as severe weather (e.g., blizzards, floods and severe winds)

• War, terrorism, or civil unrest

• Epidemics, pandemics, or government-mandated lockdowns (a key lesson from recent years!)

• Strikes or labour disputes that are external to your business

• Fires or other natural disasters

3. Actionable Steps You Can Take

Before signing any new agreement during this busy period (think supplier contracts and venue hire agreements), follow these steps:

✅ Step 1: Does the Clause Exist?

• Review all your new and existing contracts. Look for the heading "Force Majeure," "Unforeseen Events," or "Acts of God." If the contract doesn't have a force majeure clause, you may have little protection if a major external event derails your plans.

✅ Step 2: Is the Event Covered?

• If you're worried about a specific risk (e.g., severe snow impacting your delivery van routes), check if 'severe weather,' 'transport strikes,' or 'natural disaster' is explicitly listed in the clause. If it's not, the force majeure clause likely won't help you if that risk occurs.

✅ Step 3: What is the Effect?

• Crucially, read what the clause says will happen if a force majeure event occurs. Does it allow you to:

  
  

  • Suspend your obligations temporarily?

  • Terminate the contract immediately?

  • Require you to mitigate the impact (i.e., try to find a solution)?

✅ Step 4: Act Immediately

• If an event occurs that you believe qualifies as a force majeure event, you may need to notify the other party immediately and in the manner specified in the contract. You must also usually provide evidence of the event. Don't assume they know!

4. Protecting Your Business This December

Getting force majeure right is about managing risk and protecting your bottom line. You don't want to be forced to pay for a venue or goods you can't use because of an extreme, unpreventable event. The best time to check your contracts is now, before the biggest sales period of the year truly takes off! Now, back to decorating our Christmas tree...