Force Majeure Clause

A Force Majeure Clause is a provision in a contract that frees both parties from liability when unforeseen events occur, making it impossible to fulfill the agreement. These events, often referred to as "Acts of God," include natural disasters (like hurricanes or earthquakes), war, pandemics, or government actions that significantly disrupt normal operations. Essentially, it protects parties from penalties when extraordinary situations arise outside their control, allowing them to suspend or terminate obligations without facing legal consequences. Understanding this clause is important for assessing risk in contractual relationships.