In some special circumstances, I could see wanting a force majeure provision protecting me if my only real obligation was the payment of money. If I was entering a long-term strategic deal where the parties’ interests could diverge significantly over time and I was afraid that the other party would seize upon a failed payment as grounds to terminate even under a properly drafted termination-for-material-breach clause, then I would include one, especially if I was located some place where a natural disaster could affect the banking industry (many third-world countries, for example).

An example might be where you get an exclusive license to an intellectual property for an extended period of time and make the investment in marketing it; you would not want to lose your license for a failure to make a royalty payment that was outside of your control. In a bad enough disaster, you might lose the ability to even calculate the amount of the payment.* (That said, much of the risk for the situation could be removed through a sufficiently long cure period, or perhaps an extension to the cure period in the case of disaster, etc.)

But I agree with you that it should be far from the norm.

Chris Lemens

* This reminds me of a story my dad told me about when he was working for the Texas attorney general’s office defending state litigation. Apparently, their office caught fire; the damage to the building spread a fine layer of asbestos on everything. The government prohibited anyone from going into the building, even to get their files. This was before computers, so the state had no way to know anything — even what cases it had — until it got notices of default from the courts.

This post was mentioned on Twitter by negot8or: New post at licensinghandbook.com : Things that shouldn’t count as force majeure http://bit.ly/6safHk...

Force majeure provisions originated in contracts providing for future performance where hurricances and such like could directly impede performance–for example, construction contracts. Now you find them, unhelpfully, in all sorts of other contexts.

I’m not sure it makes sense for a party to want the benefit of a force majeure provision even if their performance consists only of making payments. On that basis, you’d have force majeure provisions in pretty much every contract.

Ken

It took me some digging to figure out what the public enemy is – apparently it means “the other side in case of war”. I don’t know why “war” and “acts of the public enemy” need to be listed as two items then.

Another example of context-dependent force majeure clauses: Never allow “government regulation” to be force majeure in your contract with the government.

Chris