Force Majure Clauses – Can Currency Devaluation Act As A Trigger?

INTRODUCTION

Contracts are executed with the expectation that certain conditions will continue to exist to facilitate the smooth performance of the contracts. In most cases, the anticipated conditions subsist till the conclusion of the contract. However, there are instances where the expectation of the parties is dislodged by the occurrence of uncontemplated events-usually beyond the parties' control-which alter the conditions (the continuous existence of which the entire contract depends) and render the performance of the contract difficult or impossible.

FORCE MAJEURE CLAUSES

As a precaution against this risk, parties customarily include a "force majeure" clause in their contracts to provide that on the occurrence of these unforeseen events, the affected party may be legally excused from certain obligations or their obligations under the contract may be altered without penalty.¹Although, the importance and benefit of force majeure in a contract cannot be