Force majeure: what is it?

Entering into an agreement creates obligations. One party provides a good or service, and the other pays for it. You agree on what will be delivered, how much, to whom, when and for how much. If you deviate from it, the other party can recover damages from you. But sometimes you can't help failing to honour agreements

What is force majeure? 

Force majeure (‘major force’ in French)  is also called ‘act of God’ in English. Examples of force majeure include unexpected illness, natural disasters, government measures, quarantines, epidemics, or war. With force majeure, there is nothing you could do about not fulfilling a contract. Something happened, you could not deliver, and it is beyond your fault. As a result, the other party cannot recover damages from you, for example.

Did you enter into a contract before a flood, for example? And are you then unable to fulfil your agreements because of that disaster? Then that could be a reason for force majeure.

But did you enter into a contract during the flood and do you run into problems because of that disaster? Then it is a different situation. You could have seen the risks and consequences of the agreement coming. As a result, you are less likely to be able to invoke force majeure, if at all. Unless, for example, the government takes such strict and unexpected measures at a later stage that no one could have seen it coming.

Legal rules on force majeure 

The law defines force majeure in general terms. So, it is wise to include your own force majeure article in your contract or general terms and conditions.

Force majeure in contracts or general terms and conditions

In a contract or general terms and conditions, you describe what constitutes force majeure and what the consequences are for the agreements in the contract. You may define this more broadly or more narrowly than in the law. For example, you could state that force majeure applies if deliveries are not possible due to the outbreak of war. This could mean that the other party cannot recover the damage from you.

In any case, stipulate that natural disasters, epidemics or sudden war constitute force majeure. This will prevent difficult discussions afterwards. The correct description of force majeure varies depending on the business activity. Consult your sector organisation or a lawyer for more information. Also make sure that you share the general terms and conditions in the correct manner.

Force majeur in law

Have you not made arrangements for force majeure in the contract or through general terms and conditions? Then the legal rules on force majeure (article 6:75 BW of the Dutch Civil code, in Dutch) apply.

Are you failing to fulfil your obligations? Then, according to the law, if you are completely unable to do anything about it, this is a matter of force majeure. The other party cannot then expect you to fulfil the agreement.

Invoking force majeure

A pandemic, war, or drastic government measures do not automatically constitute force majeure. But, the more drastic the circumstances, the better your chances.

Invoking force majeure is relatively easy if this has been agreed in a contract or in the general terms and conditions. However, force majeure is only described in limited terms in law, which makes it difficult to invoke successfully. You must prove that you could not have foreseen the cause and that you were unable to insure yourself against that risk.

Outcome of invoking force majeure

If a court determines that force majeure applies, this may have one of the following outcomes

• If you fail to honour the agreement, you are not liable for any resulting damages.
• You may have to honour only part of the agreement.
• You may temporarily put off your obligation to fulfil the agreement.
• Either party may terminate the agreement, for example after a certain period of time.

Help 

Do you have questions on agreements, and are you having a hard time figuring things out? Just get in touch with the KVK Advice Team. Together, we can explore your situation and see how we can help you along.