NEGOTIATING THE FORCE MAJEURE CLAUSE

Many contracts have standard "boilerplate" provisions in them, which serve the purpose of detailing rights and obligations common to most contractual situations, and also justify the big firms in sending you a four thousand page contract when you want to sell your bicycle to one of their high paying clients.

One of the common boilerplate provisions, is what is known as the "Force Majeure" clause, which you may think of as hey it ain't our fault that a war broke out during the earthquake which occured during the power failure while the electromagnetic pulse weapon went off.

The clause excludes contractual liability of a party (actually it should be the parties) in the situation of the occurence of CERTAIN unforseen events BEYOND THE PARTY'S CONTROL. Terrorist attacks for example. War. (One of the reasons they quickly shut up George W. during the first days after 9/11 when he kept saying "act of war" was it might exempt insurance companies from paying off under a force majueure clause. But he never was accused of being overly bright).

So think of the evil wicked kind of stuff that happens when either Mother Nature or Human Nature gets really pissed of at us and brings war, flood, planes crashing into your bedroom, earthquakes, flying saucers abducting your poodle--stuff like that for force majeure.

You want to BE CAREFUL when negotiating this clause--in fact many knuckleheads out there just glance through it with the idea of "what the Hell, it's just boilerplate."

First, make sure it applies to both sides. Next, make sure it doesn't deal with the financial condition or negligence of a party. Not labor, computer, software, or distributor problems either.

Let's take an example. You order one thousand widgets from Wonder Widget Inc.  Before they ship from the plant, the plant is destroyed by the Purple Death Ray launched by Emperor Ming from the planet Mongo. Okay, that's force majeure, and WWI gets off.  But if Wonder has a problem where the gloppeta gloppeta machine broke down and they can't manufacture the widgets--too bad Wonder, that's your problem, your machine, not any kind of deus ex machina type stuff.

Bottom line:  Boilerplate provisions can and should be modified by an intelligent businessman and his attorney. The old line "it's just boilerplate" is just some much business bullshit.