Force majeure
Businesses typically want their contracts to succeed, making a good profit for a good product or service. Events, however, frequently frustrate the best business intentions and a party may find itself in the position of having to default because of events beyond its reasonable control. In the ICC Force Majeure Clause 2003 and in the ICC Hardship Clause 2003, the ICC seeks to provide international traders with ready-made, off the peg, model clauses which parties to international contracts may incorporate into their contracts. The ICC Force Majeure Clause 2003 combines the predictability of listed force majeure events with a general force majeure formula which is intended to catch circumstances which fall outside the listed events. The ICC Hardship Clause 2003 balances businessmen's legitimate expectations of performance with the harsh reality that circumstances do change to make performance so hard that the contract simply must change.
Table of Contents
| Foreword |
3 |
| ICC Force Majeure Clause 2003 |
7 |
| Introductory Note on the Application and General Structure of the Clause |
7 |
| Notes |
| a) The general Force Majeure formula in paragraph 1 |
11 |
| b) Force Majeure and sub-contractors: paragraph 2 |
11 |
| c) Force Majeure and existing impediments |
11 |
| d) Listed Force Majeure events: paragraph 3 |
12 |
| e) Events in the list |
12 |
| f) Self-induced Force Majeure |
13 |
| g) Force Majeure and freedom of contract |
13 |
| h) The consequence of Force Majeure: paragraphs 4 and 5 |
13 |
| i) Force Majeure leading to termination of the contract: paragraphs 8 and 9 |
14 |
| j) Force Majeure and notice |
14 |
| ICC Hardship Clause 2003 |
15 |
| Introductory Note on the Application of the Clause |
15 |
| Notes |
| a) Hardship and Force Majeure |
16 |
| b) The origins of the clause |
16 |
| c) The parties should perfom their duties: paragraph 1 |
16 |
| d) Hardship and existing empediments |
17 |
| e) Hardship and the duty to negociate: paragraph 2 |
17 |
| ICC at a glance |
19 |
| Selected ICC publications |
21 |
Foreword
By Maria Livanos Cattaui, former Secretary General of ICC
Force Majeure literally means "greater force". Force Majeure clauses excuse a party from liability if some unforeseen event beyond the control of that party prevents it from performing its obligations under the contract.
A hardship clause, on the other hand, requests re-negociation of the contract if the continued performance of one party's contractual duties has become excessively onerous due to an unforseen event beyond the control of that party.
Negociating force majeure and hardship clauses means operating at the very core of the contract. It is important that the clauses are balanced and apply equally to all parties to the agreement. ICC has designed the ICC Force Majeure Clause 2003 and the ICC Hardship Clause 2003 to facilitate the drafting process both for companies and for their lawyers.
These clauses follow extensive discussion within ICC's Commission on Commercial Law and Practice, and particularly within the Task Force on Force Majeure and Hardship, chaired by Prof. Jan Ramberg (Sweden). Draftsman-in-chief was Prof. Charles Debattista (UK), and other task force members were Prof. Filip de Ly (Netherlands), Alexis Mourre (France), René von Samson-Himmelstjerna (Germany), Fabian von Schlabrendorff (Germany), and Peter Delargy (France).
|