Acts of God and Force Majeure: Both Need to be Addressed in Your Contracts

Patrick BarthetContracts

There are terms in every construction contract that folks read but do not fully understand.  Acts of God and force majeure are two of those. You may think they are two ways of saying the same thing. But you would be wrong.

Acts of god are physical environmental events outside of anyone’s control such as floods, earthquakes, tornadoes or other natural disasters. Force majeure, on the other hand, is a human caused event, such as an act of war, a terrorist act, a labor dispute or an electrical system failure, but it does not include a party’s death. Both are ways of describing those unforeseeable circumstances preventing a party from fulfilling an agreement. They are included in construction contracts to excuse one from liability for a lack of timely performance.

These terms should be in every construction contract as they will protect a party from any event that is unforeseen, unforeseeable and out of anyone’s actual control.

Whether you are the contractor with a project to complete, a material supplier with products to deliver, or a subcontractor with a schedule to meet, having both clauses in your contract is a good decision.