Notifying a contracting party of a force majeure event must be done in writing. This blog contains information on how to make the force majeure clause in business/commercial contracts effective and how to notify a contracting party of a force majeure event.
How to notify a contracting party
The issue of force majeure clauses in commercial contracts, particularly supplier arrangements or agreements for events which has the attention of many who have responsibility for such matters in businesses is a hot topic.
These clauses are frequently and specifically included in certain types of commercial arrangements. To be effective the clause must define the circumstances which permit determination, or suspension of the contractual obligations and set out precisely what matters are included in the definition of force majeure for the specific contract to which it relates.
If you believe that you have an event which falls within the force majeure clause, what should you do?
Notify in writing (to be able to prove the communication) that a force majeure event has taken place, providing details of the facts, and confirm that as a consequence you will consider that you are released from your obligations under the contract. In the communication include details of the following:
- The parties to the contract and date of it
- A description of the contract eg agreement to host a specific event, agreement to supply goods
- Contents of the force majeure clause in the contract
- The facts of the force majeure event upon which you rely
- A statement to the effect that “This is a force majeure event beyond our control and as a consequence (detail the effects of the event and why you cannot perform your obligations under the contract.)”. It is important to specify which obligation in the contract you are unable to perform
- Specify whether and if so when you will be able to perform that obligation
- Confirm that you will provide regular updates
- Detail steps you have and are taking to mitigate the effects of the force majeure incident
- Confirm that in accordance with the terms of the contract you are not in breach of the agreement or otherwise liable for any failure or delay in performance of your obligations caused by the force majeure event
- Confirm that your obligation to perform the specific obligation which you are unable to fulfil is suspended until (identify a date) or until such time as you are no longer prevented from doing so by the effects of the force majeure incident
- Request acknowledgement of the communication
Keep reviewing the position and document the chronology of events which are preventing you doing what the contract requires you to do, and steps which you take to mitigate against the effects of the force majeure event.
If you would like to see a free draft template letter please do email us.
For more information on force majeure please contact either Peter Taylor or Peter Ralls QC in our Dispute Resolution team.