Drafting and Enforcing Force Majeure Clauses: Mitigating Liability for Unforeseen and Unprecedented Circumstances
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Commercial Law
- event Date
Thursday, May 16, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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This CLE course will focus on drafting force majeure clauses to address the issues and factors required by U.S. courts for enforcement, as well as addressing the international reach and interpretation of what "superior force" may mean on a global level. The panel will guide counsel on the precise nature of the language needed, what constitutes "unforeseeable," the causation between an event and non-performance, and evidence that effects are so severe that an obligation cannot be performed.
Mr. Ellis’ practice focuses on manufacturing and supply chain disputes, UCC, warranty claims, contract law, and business tort law. He also routinely counsels clients on a variety of commercial contract issues. He is a member of the firm’s Business Litigation & Dispute Resolution Practice and the Automotive Industry Team. Mr. Ellis has experience litigating disputes in state and federal courts on a wide range of matters, including warranty claims, breach of contract, tortious interference, misappropriation of trade secrets, breach of non-compete agreements, and other complex commercial disputes.
Mr. Jeruchimowitz is a commercial litigator with an emphasis in the Real Estate, Construction, and Financial Services Litigation practices. He represents owners, developers, landlords and tenants in landlord-tenant and shopping center disputes, mechanics liens, foreclosures, and construction disputes, as well as banks and lenders in bank and mortgage litigation, such as mortgage fraud, commercial and residential foreclosures, mechanics lien and FDCPA issues. Mr. Jeruchimowitz also represents business owners in LLC and shareholder disputes, including direct and derivative claims. He has deep experience with post-judgment proceedings and asset-recovery litigation, including fraudulent transfer, alter ego and veil piercing litigation. Mr. Jeruchimowitz has a wide range of experience in trials in both state and federal courts, as well as arbitrations and mediation.
Mr. Schur represents clients in litigation involving contracts, fraud, antitrust and unfair competition, the Sherman Act, the Robinson-Patman Act, the Lanham Act, and the False Claims Act. He has substantial experience in antitrust and unfair competition matters, franchise litigation and environmental litigation. Mr. Schur also has considerable experience counseling clients regarding a variety of antitrust compliance issues, such as appropriate pricing policies. He has substantial experience representing the financial services industry, having represented several banks and a lender in various matters, including lender liability, derivative actions and class actions. Mr. Schur has recently spoken or written on non-compete clauses, force majeure clauses, non-disclosure agreements, confidentiality, trade secrets, mechanic’s liens, and the FTC chair’s efforts to rein in Big Tech via federal antitrust law.
As the global economy continues to face the impacts of geopolitical events, natural disasters, and other challenges, many businesses are defaulting on contractual obligations. To mitigate liability for unprecedented events, companies are taking a closer look at force majeure clauses, which were previously considered a boilerplate feature of most agreements that were seldom negotiated or considered by counsel. However, since the COVID-19 pandemic, contract drafters are now taking care in drafting force majeure clauses as a way to provide an affirmative defense to default, but the question remains--what elements or challenges invoke the terms of these clauses?
Businesses must determine whether circumstances presented by various events meet the legal requirements of force majeure and that such provisions are sufficiently specific to be enforceable. For a party to invoke the clause, the event must be unforeseeable. Boilerplate agreement language often includes a laundry list of events defining an "act of God," but a court may or may not agree that a particular event is covered. Further, enforcement of a force majeure clause requires that the company prove that the force majeure event defined in the contract caused a party's inability to perform a contract obligation.
Force majeure enforcement is also highly contingent on the country of implementation and, in this circumstance, the impact of a particular event on a region's supply chain and workforce. China and the European Union use varying definitions for enforcement, and anticipating issues that may arise in a default informs counsel on how to draft the optimal provision to protect a business from future catastrophic losses.
Listen as our expert panel provides practical advice on drafting a precise and enforceable force majeure provision so counsel may save their clients from unforeseen and unprecedented circumstances.
- Elements of force majeure
- Unforeseeable
- Causation
- Definitions of acts of God
- Severity of event
- Prior global force majeure events and court decisions
- Global enforcement
- China
- European Union
The panel will review these and other key issues:
- What are the necessary elements of force majeure provisions?
- How might the definition of unforeseeable impact enforcement?
- How is the nexus between the inability to perform and the force majeure event determined?
- How does global enforcement of force majeure provisions vary in China and the European Union?
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