Nairobi
By Aileen Ingati Aluso
Introduction
Force majeure is a contractual term originating from the French civil law based on the Roman doctrine vis major meaning “superior force”. The vis major concept was referred to as acts of God.
The Black’s Law dictionary defines it as an event or effect that can neither be anticipated nor controlled and includes both acts of God and acts of people.
The doctrine of force majeure is not found under common law. However, clauses either excusing contractual parties from their obligations (in part or in full), suspending or extending their period of performance where performance is hindered or affected by events that are out of their control are used to grant relief to parties in contracts affected by the events.
Drafting Force Majeure Clauses
When drafting the clauses, the words ‘force majeure’ are rarely unqualified. The initial part of a force majeure clause usually defines the acts or events that qualify as force majeure that will then lead to invoking of the force majeure clause.
The clauses may take a generalized outline under a “catch all phrase” whereby any event beyond control of the parties is referred to as force majeure, or a definitive form where events deemed as force majeure are listed in the clause.
The clauses may take a generalized outline under a “catch all phrase” whereby any event beyond control of the parties is referred to as force majeure, or a definitive form where events deemed as force majeure are listed in the clause.
The risk that comes with the former approach is that of uncertainty, since the definition is too wide while with the latter, the clause will only be restricted to the listed events and will not apply to any other outside them.
In this light, parties might therefore want to take up both approaches when drafting force majeure clauses, listing the force majeure events and including a catch all phrase.
“The party must comply with procedural requirements under the contract such as to give notice of intention to rely on the clause to the other party within a particular period, including any formalities required for service of notices. Some clauses may also require updates to be provided and or an express obligation to mitigate”
The clause may refer to performance as being ‘prevented’, ‘hindered’ or ‘delayed’ by force majeure. A force majeure clause must therefore be interpreted with a close attention to the words which precede or follow it, and with due regard to the nature and general terms of the contract.
Enforcing Force Majeure Clauses
The burden of proof in force majeure clauses is on the party wishing to exercise the force majeure clause to show that the relevant event falling within the force majeure clause occurred.
The party must comply with procedural requirements under the contract such as to give notice of intention to rely on the clause to the other party within a particular period, including any formalities required for service of notices. Some clauses may also require updates to be provided and or an express obligation to mitigate.
The affected party must issue a force majeure notice to the other party. The notice must stipulate in detail the nature of the force majeure, how it has affected performance of its obligation and the estimated duration of the force majeure event.
The notice should be clear as the relief sought by the affected party.
A party seeking to rely on a force majeure clause should show that: –
- The force majeure event was the cause of the inability to perform and delayed performance,
- The non-performance was due to circumstances beyond their control; and
- There were no reasonable steps that they could have taken to avoid or mitigate the event or its consequences.
The party receiving the notice may assess the claim and could agree to proceed on the basis of force majeure. If a dispute arises, the contractual provisions may guide on the steps taken by the parties so as to resolve the dispute.
Misconception
A common misconception is that the parties to a contract will be automatically relieved from performing their obligations if some kind of disaster occurs. However, the English law doctrine of ‘frustration’ will only provide the parties with limited remedies and will only apply where performance is rendered impossible.
The Covid-19 Virus and its relation to Force Majeure
The World Health Organization declared the Covid-19 virus a pandemic, and on 14th March, 2020 Kenya confirmed its first case of the virus. Since then the government has tried to contain the virus and has issued directives that have affected the general operation of business across the country. This means that performance of contractual obligations by parties may have been put to strain, hindered or suspended in many contracts as a result of the government directives.
Contracting parties that have been affected by the current government directives due to the Covid-19 virus may therefore decide to invoke force majeure. This however will be dependent on firstly, the existence of a force majeure clause in the particular contracts and secondly the manner in which the clause is drafted, that is, whether it provides for pandemics as force majeure events.
The current state of affairs acts as an eye opener to parties intending to contract in coming days on the importance of embedding a force majeure clause in contracts, and having one that is keenly drafted, well defined and thoroughly inclusive.
Conclusion and Recommendations
In the current state of the effects of Covid-19 virus, affected contracting parties may invoke force majeure clauses in their contracts, complying with the procedural guidelines in the contracts.
In the event that the force majeure clause does not provide for the current pandemic as a force majeure event, the parties can agree to find means of mitigating the effects.
A party can also claim breach of contract in the absence of a force majeure clause where a party fails to perform their contractual obligations and does not notify the other party.
Force majeure is not a principle of law, and purely emanates from contractual terms. Parties in contracts therefore need to not only have a force majeure clause, but also be keen on its structure and drafting, especially with regard to the events to be covered under the clause in order to effectively provide relief to parties invoking it.
Ms Ingati is an Advocate of the High Court and a Senior Partner at Kazi Advocates. Email : aluso@kaziadvocates.com
