Force Majeure

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What is Force Majeure?

Force majeure refers to events beyond the control of contracting parties that make it impossible or impracticable to meet contractual obligations. When a contract includes a force majeure clause, it may allow obligations to be suspended or delayed without liability, provided the event is covered and directly prevents performance. In freight and logistics, this can apply when ports close, routes are restricted, or operations are suspended due to unavoidable disruption. Events covered by force majeure clauses include:

  • Natural disasters: Earthquakes, floods, and hurricanes.

  • Government actions: Border closures, sanctions, or regulatory restrictions.

  • Industrial action: Strikes that disrupt transport or port operations.

  • Public health emergencies: Events that restrict movement or business activity.
     

Preparing for Force Majeure Events

While force majeure events cannot always be predicted, their impact can be reduced through practical preparation. This includes maintaining appropriate insurance to cover losses linked to major disruption, ensuring contract wording clearly defines qualifying events and notification requirements, and putting business continuity plans in place so teams have workable contingencies and recovery steps if operations are interrupted.