Force Majeure - Notices, Consequences And Mitigation

A force majeure notice is designed to excuse performance where an event beyond the control of a party affects the ability of that party to perform its obligations under a contract. The devastating floods and weather in Queensland and northern New South Wales have reinforced the need to include appropriate force majeure clauses in contracts, and to undertake a careful review process following a force majeure event.

1. Review Effect

Companies affected by a force majeure event such as the recent floods or cyclone should promptly review the effect of the event on their business as a whole, and on their ability to perform all or part of a contract. This also applies to companies indirectly affected by the floods or cyclone – for example those whose suppliers have issued, or have indicated that they will issue, a force majeure notice. In such cases changes to timetables, supply arrangements and deliverables (physical and intangible) will need to be reassessed.