HoneyBook Pro and attorney Paige Griffith provides a force majeure clause template you can add to your contracts to protect your business during unexpected events, such as natural disasters and pandemics like COVID-19.
Unexpected situations happen all the time– from pandemics to natural disasters. We all hope business can keep moving, but sometimes these events prevent a business from being able to perform its obligations.
In law, these interruptions are due to force majeure events, which translates from French to “greater force.” These unforeseeable events are out of the control of the parties involved, including business owners, employees, vendors and clients. Though it sounds like it should be, force majeure isn’t implied in common law. Instead, you’ll need to protect your business from the inability to perform your services. Including a force majeure as part of your contract clauses can help keep you protected.
If you work in-person events, this clause can protect you and your business from situations like flood, earthquakes, civil disorder, and more. Even if you don’t work events, the same clause is crucial to protect you if unforeseen events affect your workplace, including your internet connection.
Attorney and HoneyBook Pro Paige Griffith of The Legal Paige recommends modifying or adding three significant clauses into your existing contract templates to protect your business:
(2) Safe working environment clause
(3) Failure of company to perform services clause
See the photography contract example below.
Need a force majeure clause for your business contracts?
Copy and paste the force majeure clause sample language below into your existing contract templates. Make sure to update the bolded fields.
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What is a force majeure clause?
A force majeure clause includes three elements:
- It specifies the events which enable either party to declare a force majeure/act of God event
- It states how a party should notify its counterparty about the occurrence
- It describes the consequences after a force majeure event has occurred.
Essentially, a force majeure clause should apply to each party in the agreement, and it can excuse a party from performing their contractual obligations when an unexpected event occurs that is beyond their control.
With a force majeure clause, service providers can achieve much better flexibility in times of crisis, ranging from labor disputes and strikes to acts of terrorism, that make their work impractical/impossible/illegal without fear of liability.
“Most often I see contracts missing parts 2 and 3 in their force majeure clause,” says Paige. That means that many businesses fail to include how they’ll notify their clients about a force majeure event, as well as the consequences after a force majeure occurs. Be sure to consult with your business attorney so you can ensure these specific terms are included in your contracts.
Is the COVID-19 pandemic considered a force majeure event?
Paige says, “People should be sure to spell out that ‘epidemics and pandemics’ are included as qualified force majeure event, and indicate the number of days following the force majeure event that the other party may terminate and the remedies allowed.
Also, as it stands [as of 2021], the COVID-19 outbreak and its consequences are no longer fully unpredictable and may therefore not qualify as a ‘force majeure event’ in contracts that are entered into right now. Be sure to have other clauses in place such as ‘safe working environment clause’ and ‘failure of company to perform services clause’ to protect yourself in case the force majeure clause is not applicable.”
What are other examples of force majeure events?
A force majeure provision can apply to public health emergencies like pandemics and epidemics as well as other events out of each party’s control. If any of these events occur, it releases the service provider from their performance obligations.
- Economic conditions like strikes
- Governmental actions like war and invasion
- Environmental/natural disasters like storms, floods, and fire
- Infrastructure failures like transportation and energy disruptions
What happens without a force majeure clause?
Without a force majeure provision in your contracts, you may still be able to use common law doctrines to determine how to handle interruptions or events that are out of your control. However, you’ll need to do your due diligence to understand if these common law doctrines apply within the state in which you conduct business.
- Doctrine of impossibility: May excuse the service provider’s performance if their principal purpose is impossible to complete due to unforeseen circumstances. When using this doctrine, it would be the service provider’s responsibility to show that an unforeseen event or circumstance would make their performance vitally different than what is expected.
- Doctrine of frustration: May excuse the service providers’ performance if their principal purpose is substantially frustrated. This means that some events covered by a force majeure may not be covered by a doctrine of frustration if the event doesn’t directly affect the service being provided.
Keep your business legally protected
You’ll be able to send your contract and invoice at the same time, so your clients are clear on all your expectations and boundaries before moving forward with payment. Furthermore, you can send automated reminders for your contracts if your clients need to be nudged to move forward with contract signing.
By keeping your clients professional and organized, you can stay protected as you move forward with booking.
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Disclaimer: This force majeure clause template is provided for your convenience to help protect your business and minimize the impact from COVID-19 and other types of health emergencies and natural disasters as part of a business continuity plan for small business. We consulted with attorney Paige Griffith, J.D., of The Legal Paige, who wrote the Force Majeure clause. While a professional was consulted, this is not provided as a substitute for legal advice. If you have any questions about this template or your finished contract as it relates to your specific business, please contact a licensed attorney.