Key Takeaways

  • A force majeure clause excuses performance due to extraordinary, uncontrollable events.
  • Common triggers include natural disasters, wars, pandemics, and supply chain breakdowns.
  • Valid clauses must define events clearly, describe notice procedures, and set performance obligations.
  • Sample language helps parties draft enforceable, practical clauses.
  • Timely notification and mitigation efforts are critical to enforce a force majeure defense.

Force Majeure Clause in Construction Contract

A force majeure clause in construction contract will indicate that one party is excused from performing under the contract. The clause will identify that an unforeseen event occurring during the duration of the construction contract will excuse the party from performing. Such events cannot be controlled by either party, without any fault or negligence of the party that should be performing under the contract.

Construction Contracts: An Overview

The main reason to draft a formal construction contract is to indicate all essential terms and conditions of the construction project in writing. This includes the length of the project, costs, materials, limitations, and other important provisions.

Another purpose of formalizing a construction contract is to allocate risk, which is why it is important to include force majeure clauses in such contracts. For example, if an unforeseen weather event occurs, such as a hurricane, flood, tornado, or windstorm, then the continuation of performance under the contract will be excused, which is exactly what the force majeure clause states in the contract itself.

If, however, the clause is not included in the contract, then the party hiring the construction company to complete the job could potentially file a legal suit against the construction company for failing to finish the job on time.

In addition to unforeseen weather events, the force majeure clause could cover other events, such as a shortage of materials. For example, if the contracting company can’t obtain the proper amount of materials due to a shortage of steel in the steel industry, then the contracting company cannot be held liable.

Requirements for Force Majeure Clause

There are several requirements that must be met in order for the force majeure clause to take effect in a construction contract:

  1. The event must be beyond the control of the parties
  2. The event either precludes or postpones performance under the contract
  3. The triggering event makes performing under the contract more problematic or more expensive
  4. The claiming party wasn’t at fault or negligent
  5. The party wanting to trigger the force majeure clause has acted diligently to try to mitigate the event from occurring

Common Language in Force Majeure Clauses

A well-drafted force majeure clause should use clear, specific language to define the scope and limitations of nonperformance. Here is a general force majeure clause example commonly used in construction contracts:

“Neither party shall be liable for any failure or delay in performing its obligations under this contract if such failure or delay is due to acts of God, war, terrorism, embargo, government orders, pandemics, labor strikes, natural disasters, or any other event beyond the reasonable control of the affected party. The affected party shall notify the other party promptly and shall resume performance as soon as the condition causing the delay abates.”

This language not only lists triggering events but also includes notice and mitigation requirements—key elements to enforceability.

Four Components in a Force Majeure Clause

When drafting the clause, there are four components that should be included as follows:

  1. An overview of the type of event that will trigger force majeure, i.e., hurricane, flood, etc.
  2. The length of the condition, i.e., how long the hurricane lasted
  3. A description indicating how the force majeure is to be communicated to the other party
  4. The obligation of both parties if a force majeure event occurs, i.e., the subcontractor’s performance will be excused or delayed

Tailoring Clauses to Construction Projects

Force majeure clauses should be tailored to reflect the realities of construction work. This includes:

  • Geographic risks (e.g., floods in coastal areas or earthquakes in seismic zones)
  • Material dependencies, such as reliance on specific types of imported steel or concrete
  • Labor market disruptions, particularly union strikes or skilled labor shortages
  • Government-imposed delays, such as permitting freezes or pandemic lockdowns

Customizing the clause helps ensure courts see it as relevant and reasonable, strengthening its enforceability.

Triggering Events and Duration

Some of the typical occasions that will trigger force majeure include flood, fire, war, government orders, explosion, lightning, earthquakes, etc. The length of the occurrence must be specifically identified in the construction agreement. Generally, it corresponds to the overall duration of the contract.

The clause itself will also include an obligation to diminish the risk, as the claiming party will need to act with diligence to remedy the event. However, it is clear the claiming party cannot remedy a naturally occurring event like a flood or fire. While this cannot be mitigated, the question generally turns to whether or not the claiming party has to mitigate the effects of the event itself.

Notification

The notification is a condition precedent in declaring the force majeure. Generally, the clause itself will include how the other party will be notified of the triggered event. When the notification is properly given, force majeure protection will commence. Keep in mind that improper notification could result in the force majeure clause not being triggered, and the construction party could end up being liable, even when the party wouldn’t otherwise be liable.

An example would be if a flood occurs, and the construction company can no longer perform under the contract temporarily, the construction company must notify the other party that it cannot perform under the contract for the time being, which will cause a delay in the completion of the project.

Legal Consequences of Poorly Drafted Clauses

A poorly written or overly vague force majeure clause can expose a party to liability. Courts generally construe ambiguous language against the drafting party. If the clause doesn't include an exhaustive list of force majeure events or requires notice within a specific timeframe and that notice is late or missing, a court might deny relief.

Furthermore, some jurisdictions apply a narrow interpretation, only excusing performance if the event renders it truly impossible—not just impractical or more expensive. This highlights the importance of defining terms, specifying notice deadlines, and ensuring internal procedures are in place for rapid communication and documentation.

Frequently Asked Questions

  1. What is a force majeure clause in a construction contract?
    It’s a contractual provision that excuses one or both parties from performance when extraordinary events outside their control prevent them from fulfilling their obligations.
  2. Can labor strikes trigger a force majeure clause?
    Yes, many clauses explicitly include labor disputes or strikes as triggering events, provided they are beyond the control of the affected party.
  3. Does COVID-19 qualify as a force majeure event?
    It can, especially if the clause includes terms like "pandemic," "government orders," or "public health emergency." Courts have increasingly recognized such language in the post-COVID era.
  4. Is a force majeure clause required in every construction contract?
    It’s not legally required, but highly recommended to allocate risk fairly and avoid litigation in the event of unforeseen disruptions.
  5. What happens if a party fails to notify the other of a force majeure event?
    Failure to follow notice provisions may result in the clause not applying, meaning the party could still be liable for nonperformance. Timely, documented notice is essential.

If you need help learning more about the force majeure clause in a construction contract, or if you need legal help to identify whether or not the force majeure clause has been triggered, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.