4 Common Force Majeure Clause Mistakes and How to Revise Them Post-Global Disruptions
Force majeure clauses have taken center stage in legal discussions following recent global disruptions. This article examines common mistakes in these clauses and provides expert-backed strategies for revision. Drawing on insights from seasoned professionals, it offers practical guidance for strengthening and modernizing force majeure provisions in the post-pandemic era.
- Specificity Strengthens Force Majeure Clauses
- Modernize Clauses for Unforeseen Global Risks
- Clarify Financial Obligations During Disruptions
- Address Cascading Effects in Real Estate Transactions
Specificity Strengthens Force Majeure Clauses
One common mistake I frequently see in force majeure clauses is the overuse of vague, catch-all language like "any event beyond the parties' control." While this seems comprehensive, it often leads to disputes about what events truly qualify. Especially after COVID-19 and global supply chain disruptions, it became clear that such clauses need specificity.
I now recommend drafting tailored force majeure clauses that include concrete examples—like pandemics, cyberattacks, and government-imposed lockdowns—and clearly define the consequences. We also specify procedural obligations: notice requirements, timelines, and burden of proof. A well-defined force majeure clause is not only more enforceable but also offers better protection and predictability for all parties.
Modernize Clauses for Unforeseen Global Risks
The most pervasive mistake in force majeure clauses is treating them as dusty, boilerplate relics from a more predictable era. Recent global disruptions have exposed these clauses as dangerously outdated, often silent on modern risks ranging from COVID-19 and other pandemics to cyberattacks, climate-driven disasters, politically-driven tariffs, and politically motivated sanctions. My drafting approach has shifted toward proactive risk modeling, explicitly naming these foreseeable "unforeseeables" and building in procedures that courts can enforce with precision. A modern clause should anchor its trigger to objective external standards, such as government declarations, and include defined recovery windows before termination is permitted. Equally important, it must anticipate today's systemic vulnerabilities, cascading supply chain failures, ESG-driven compliance shocks, and digital infrastructure outages. The best clauses now operate not as afterthoughts, but as living roadmaps, detailing notice, mitigation, and recovery duties with such clarity that the contract itself becomes a stabilizing force, even amid chaos.
Clarify Financial Obligations During Disruptions
From my experience in commercial real estate funding, the biggest mistake is when clauses vaguely suspend the entire contract without carving out financial obligations. I once reviewed a deal where a borrower believed loan payments stopped altogether, which caused tension and serious delays. To prevent that, I now insist on defining which duties must continue, especially around debt service, while still allowing flexibility for true disruptions.
Address Cascading Effects in Real Estate Transactions
The biggest mistake I see is when force majeure clauses don't account for cascading effects on real estate transactions--like when a seller can't move out because their new home purchase fell through due to the same disruption. In our business, we've learned to build in flexible closing timelines and alternative solutions, because a homeowner facing foreclosure can't wait months for a 'disruption' to resolve. I now include specific provisions for continuing essential services and maintaining property condition even during force majeure events, which protects both parties when life throws curveballs.
