Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Force Majeure Clauses Can Soften the Blow of Devastating Hurricanes

Author: Scarinci Hollenbeck, LLC

Date: September 28, 2017

Key Contacts

Back

During And In The Wake Of The Storms, Businesses Across The Country Have Taken A Closer Look At The Force Majeure Clauses In Their Business Contracts

Few U.S. businesses have been able to escape the disruptions caused by Hurricanes Harvey and Irma early in 2017’s hurricane season. The back-to-back storms have interfered with fuel and product supply and demand and manufacturing, distribution, and other essential business activities. They have caused considerable losses.

During and in the wake of the storms, businesses across the country have taken a closer look at the force majeure. While these clauses can be overlooked as “boilerplate” form provisions, like other boilerplate their wording can become extremely important when disaster strikes.

Including and Drafting Force Majeure Clauses

Force majeure, meaning “superior force” in French, can relieve a party from performing duties under the contract in certain circumstances. The circumstances may include those deemed beyond the party’s control and that make performance inadvisable, commercially impracticable, illegal, or impossible. Apt examples include natural disasters like hurricanes, floods, earthquakes, and other events commonly referred to as “acts of God.” However, they may also apply to man-made disasters including include war, terrorism, civil disorder, supply shortages, and labor strikes.

Without a force majeure clause in an agreement, parties may rely on less specific common law remedies such as impracticability and frustration of purpose, which may be less predictable in interpretation and much less favorable to the party whose performance is impeded. Therefore, it is imperative that every business consider whether its supply and production agreements contain a specifically drafted force majeure clause.

Like other contract provisions, force majeure clauses may come in many typical forms which can be customized to meet the reasonable needs of the contracting parties. Some standard provisions are worded too narrowly or even too broadly, so it is important to make sure that it provides reasonably sufficient protection for any party needing it. For example, some provisions only excuse performance when it is impossible, rather than impractical (untimely, expensive etc.). Other provisions may list certain circumstances that excuse performance, rather than including a catchall such as “other unforeseeable events beyond the control of the parties.”

Enforcing Force Majeure Clauses

When disaster looms or is in progress, one of the first steps will be to evaluate a business’ major agreements and its force majeure clauses, as well as to determine whether a contracting party or counter-party may invoke the clause. The terms of the contract may be ambiguous as to whether the event qualifies, and the party seeking to rely on the clause may have the burden of establishing the occurrence of a force majeure event.

The terms of the contract are likely to specify specific and detailed notice requirements that may be required, as well as a timeline for providing such notification. Businesses will review agreements to determine if either party is subject to mitigation or allocation requirements. Many agreements require the impacted business to use “best efforts” and/or act “in good faith” to resume normal operations in the wake of a force majeure event. A contract will also often state which obligations may be deferred or relinquished, and which duties may remain in force.

Because dealing with hurricanes and other disasters can be unexpected and costly, it is always best to review any applicable force majeure provisions for the business’ major agreements.

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Charles Yuen, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know post image

One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know

Part 2 – Tips Excluded from Income Certain employees and independent contractors may be eligible to deduct tips from their income for tax years 2025 through 2028 under provisions included in the One Big Beautiful Bill. The deduction is capped at $25,000 per year and begins to phase out at $150,000 of modified adjusted gross […]

Author: Scott H. Novak

Link to post with title - "One Big Beautiful Bill: New Tip Income Tax Rules Employers & Workers Need to Know"
One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know post image

One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know

Part 1 – Overtime Pay and Income Tax Treatment Overview This Firm Insights post summarizes one provision of the “One Big Beautiful Bill” related to the tax treatment of overtime compensation and related employer wage reporting obligations. Overtime Pay and Employee Tax Treatment The Fair Labor Standards Act (FLSA) generally requires that overtime be paid […]

Author: Scott H. Novak

Link to post with title - "One Big Beautiful Bill: New Overtime Tax Rules Employers and Employees Need to Know"
New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business post image

New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business

In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York’s long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York […]

Author: Dan Brecher

Link to post with title - "New York’s FAIR Business Practices Act: What the New Consumer Protection Measure Means for Your Business"
How to Reduce Legal Risk as Your New Jersey Business Grows in 2026 post image

How to Reduce Legal Risk as Your New Jersey Business Grows in 2026

For many New Jersey businesses, growth is a primary objective for the New Year. However, it is important to recognize that growth involves both opportunity and risk. For example, business expansion often results in complex contracts, an increased workforce, new regulatory requirements, and heightened exposure to disputes. Without proactive planning, even routine growth can lead […]

Author: Ken Hollenbeck

Link to post with title - "How to Reduce Legal Risk as Your New Jersey Business Grows in 2026"
Crypto Investor Protection: SEC and CFTC Enforcement Trends post image

Crypto Investor Protection: SEC and CFTC Enforcement Trends

Crypto investor protection continues to evolve, with the SEC and CFTC investing resources and coordinating more closely to uphold regulatory standards. Whether you’re a retail investor, an institutional trader, or part of a crypto startup, understanding enforcement trends is essential for navigating this dynamic and high-stakes regulatory environment. Crypto Is No Longer the Wild West […]

Author: Dan Brecher

Link to post with title - "Crypto Investor Protection: SEC and CFTC Enforcement Trends"
New Jersey’s Next Manufacturing Tax Credit: Stability Secured, Timing Matters post image

New Jersey’s Next Manufacturing Tax Credit: Stability Secured, Timing Matters

A Settled Regulatory Environment Enables Confident Capital Planning New Jersey’s new manufacturing incentive program, Next New Jersey Manufacturing Program,  enters 2026 with something uncommon in economic development these days: policy stability. The statute is enacted, New Jersey Economic Development Authority’s (“NJEDA”) rules are adopted, and the application portal is open. With the election outcome settled, […]

Author: Michael J. Sheppeard

Link to post with title - "New Jersey’s Next Manufacturing Tax Credit: Stability Secured, Timing Matters"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!