Force Majeure Clauses and Liability
By Pyle Law, December 29 2022 6:09 pmWhen the COVID-19 pandemic started and many businesses were forced to close, there was a lot of discussion about “force majeure” clauses in business contracts. This clause was not a new legal concept, nor did it go away when companies reopened their doors. Instead, many contracts – past, present, and future – will have force majeure clauses.
In some situations, a company might raise a defense to liability for damage, harm, or losses due to a force majeure clause. These defenses are often challengeable, and you need help from an injury lawyer if this might be an issue in your case.
Force majeure refers to something that happens due to “greater force,” usually meaning an act of God. When something truly falls under the category of force majeure, parties to the contract should not be accountable for the resulting damages. This is because the law does not hold parties liable for unavoidable and unforeseeable events that interrupt business as usual.
Generally, events that might qualify as force majeure include:
If a natural disaster or uncontrollable human conduct disrupts a party’s ability to fulfill its obligations, the force majeure clause can protect them from liability. However, some parties and insurance companies try to use force majeure clauses to avoid liability when they should be fully liable for a victim’s losses.
There are three main elements that companies must prove for a successful force majeure defense against liability. These are:
Just because a natural disaster happens does not mean that a large company should be free from its contractual obligations. If an insurer is refusing to pay a claim based on force majeure, the claimant can often challenge this, as the disaster likely does not render payment impossible.
While force majeure clauses are important to protect companies when they truly cannot perform their contractual obligations due to unforeseeable circumstances, it should not be a catch-all for corporations to avoid paying out insurance claims or liability for injuries and losses to others.
These clauses tend to favor large corporations and not individuals or small businesses. Anyone facing this type of defense needs the right legal representation to ensure they properly challenge force majeure claims. This type of defense is not common in personal injury cases, but it can arise. When it does, you need an experienced attorney to go up against the insurance companies or other parties that are trying to wrongfully avoid liability.
At Pyle Law, we take on complex cases, including those involving complicated legal defenses. If you have an injury and would like to discuss your option, please contact us for more information.
