Real Estate Force Majeure Clause In Phoenix
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In real estate, force majeure refers to a contractual clause that allows parties to suspend or terminate their obligations when certain events beyond their control occur, making performance inadvisable, commercially impracticable, illegal, or impossible.
Because the concept is foreign, lawyers who review or draft contracts governed by U.S. law should start with the assumptions that 1) principles of force majeure will not be implied in a contract that does not expressly provide for them, and 2) U.S. courts will interpret and apply force majeure provisions narrowly.
Either Party shall be excused from performance and shall not be in default in respect of any obligation hereunder to the extent that the failure to perform such obligation is due to a Natural Force Majeure Event.
For events to constitute the use of force majeure, they must be unforeseeable, external to contract parties, and unavoidable. Force majeure means “greater force” and is related to an act of God, an event for which no party can be held accountable.
The Limits of Force Majeure There are at least two principles that commonly limit the application of a force majeure clause: if the event (1) made performance impractical and (2) was the cause of a party's nonperformance.
How to apply for force majeure leave. You must tell your employer as soon as possible that you need to take force majeure leave. As soon as you return to work, you must make your application in writing to your employer.
If a contract is silent on force majeure or if the event does not meet the definition of force majeure under the parties' contract, a party's performance may still be excused in certain circumstances under the doctrine of commercial impracticability.
The Force Majeure clause should clearly identify the obligations that will be excused in the event of a Force Majeure event. The clause may specify that all obligations will be excused or only certain obligations, depending on the nature of the contract and the parties' preferences.
If a contract is silent on force majeure or if the event does not meet the definition of force majeure under the parties' contract, a party's performance may still be excused in certain circumstances under the doctrine of commercial impracticability.
Here is an example of a force majeure clause template: Force Majeure: Neither party shall be liable for any failure or delay in performance under this Agreement due to causes beyond its reasonable control, including but not limited to acts of God, government restrictions, wars, insurrections, or natural disasters.
