When it comes to construction contracts, many unforeseeable events can impact the project`s outcome, such as natural disasters, labor strikes, or even acts of war. As a result, it is crucial to have a force majeure clause in your construction contract to protect both parties from liability in the event of unpredictable circumstances.
A force majeure clause essentially states that if an unforeseeable event occurs that is beyond the control of either party and it prevents one or both parties from fulfilling their contractual obligations, then the affected party is excused from their performance obligations, and the contract may be temporarily suspended or terminated.
Here is an example of a force majeure clause in a construction contract:
Force Majeure. Neither party shall be liable for any delay, failure, or interruption of performance hereunder due to any cause beyond its reasonable control, including but not limited to acts of God, fire, explosion, flood, war, acts of a public enemy, acts of terrorism, pandemics, labor disputes, strikes, or shortages of materials. If such a force majeure event occurs, the party affected shall provide written notice to the other party as soon as reasonably practicable. The affected party shall use reasonable efforts to overcome the effects of the force majeure event to the extent reasonably possible.
Moreover, it is essential to note that the force majeure clause must be explicitly included in the construction contract and cannot be assumed as a given. Additionally, the clause`s scope and language should be carefully drafted and negotiated to ensure that it covers all of the possible scenarios that could affect the project.
In conclusion, when drafting a construction contract, it is crucial to include a force majeure clause that protects both parties in the event of an unforeseeable circumstance. Such a clause can save both parties from costly legal disputes and delays. Always consult with experienced legal counsel to ensure that your construction contract has a robust and comprehensive force majeure clause.