You are on page 1of 20

Contracts : Force Majeure Concept or

Force Majeure Clauses ?

Marel Katsivela *

I. – INTRODUCTION

Whether domestic or international, “excuse” doctrines or clauses play an


important role in protecting contracting parties. Such doctrines or clauses
render fulfilment of contractual obligations actually or virtually impossible,
excusing performance under a contract. The civil law force majeure concept,
the common law frustration doctrine as well as contractual force majeure
clauses may have this effect on contracts.
The civil law force majeure concept and force majeure clauses will be the
main focus of this article. Our study will be geographically limited to France,
the Canadian province of Québec and Greece for civil law jurisdictions and
the United States and England for common law systems. Although the
principles that appear in the present article may apply by analogy to other
areas of law, the main interest of our analysis will be obligations arising out of
contractual provisions. Once the comparative legal analysis is completed we
will examine international legal documents (Article 7.1.7 of the UNIDROIT
Principles of International Commercial Contracts and the ICC model force
majeure clause 2003) that frequently apply at the international level in this
context.

II. – FORCE MAJEURE UNDER CIVIL LAW

The concept of force majeure (superior force) 1 has its origins in Roman law.
Under the name “vis major” or “vis divina”, Roman law designated

* Assistant Professor, College of the Bahamas, University of West Indies.


1 While the term “force majeure” is much used in English-speaking countries, its English
equivalent, described as “superior force” in the English translation of the Québec Civil Code does
not appear to be in common use in the English-speaking world. John O’CONNOR, “Force Majeure,
Frustration and Exception Clauses”, <http://www.amac.ca/8-J_OConnor.pdf> (visited 5 Jan. 2007).

Rev. dr. unif. 2007 101


Marel Katsivela

unforeseeable and irresistible events that excused a debtor of performance.2


The concept was later adopted by civil law countries 3 and is found today in
the French Civil Code (Napoleonic Code) which dates back to 1804.
In civil law jurisdictions force majeure constitutes an excuse of perform-
ance even in the absence of an express contractual provision. The reason for
this is that domestic laws or codes provide that force majeure excuses the
debtor of all liability regarding non-performance of an obligation.4 We will
examine the French and Québec civil law concept of force majeure. Greek
law on force majeure (“ανωτερα βια” in Greek) will also be commented on in
order to demonstrate the similarities but also the differences in the legal
treatment of the force majeure concept in the different civil law jurisdictions.
Article 1148 of the French Civil Code provides:5
No claim for damages arises where a debtor was prevented from transferring or
from doing that to which he was bound, or did what was forbidden to him, by
reason of force majeure or of a fortuitous event.
Article 1470 of the Québec Civil Code reads:6
A person may free himself from his liability for injury caused to another by
proving that the injury results from superior force, unless he has undertaken to
make reparation for it.
A superior force is an unforeseeable and irresistible event, including external
causes with the same characteristics.
Article 336 of the Greek Civil Code provides:7

2 One of the Latin maxims that reflects this concept is the following: “Fortuitos casus
nullum humanum concilium providere potest nec cui prœviso potest resisti”. Robert TASCHEREAU,
Théorie de Cas Fortuit et de la Force Majeure dans les Obligations 1-2 (1901) (Ph.D. Thesis,
University of Laval – Faculty of Law of Montréal) (on file with the University of Montréal Law
Faculty Library).
3 Caslav PEJOVIC, Civil Law and Common Law: Two Different Paths Leading to the Same
Goal, <http://www.upf.pf/recherche/IRIDIP/RJP/RJP7/16Pejovic.doc> (visited 5 Jan. 2007).
4 TASCHEREAU, supra note 2.
5 Other articles of the French Civil Code that refer to the force majeure concept are Arts.
1348, 1631, 1730, 1733, 1754, 1755, 1784, 1929, 1934 and 1954. Many of these articles also make
reference to “fortuitous events”.
6 Arts. 876, 1210, 1308, 1693, 1701, 1727, 2029, 2034, 2037, 2038 and 2072 of the Québec
Civil Code are some examples of articles that refer to the force majeure concept. The last five articles
deal with carrier liability and force majeure in the case of carriage of goods and passengers.
7 Greek court decisions have associated this article with the concept of force majeure in
resolving mainly landlord tenant disputes: Piraeus Court of Appeals, 2005, No. 858/2005 (386929)

102 Unif. L. Rev. 2007


Contracts: Force Majeure Concept or Force Majeure Clauses?

The debtor is excused of performance of any obligation caused by his inability to


perform if he proves that his inability is due to an event for which he was not
responsible. The debtor has the obligation to notify the creditor immediately after
he becomes aware of his inability to perform.
The fact that the French Civil Code uses both the terms “fortuitous event”
and “force majeure” suggests that there is a conceptual difference between
them. Theoretically, a fortuitous event may imply a cause of damage arising
within the “debtor’s sphere” of control (e.g. fire) that is “relatively” insur-
mountable.8 On the other hand, a force majeure event suggests an event
outside that sphere (e.g. flood) that is “absolutely” insurmountable.9 In
practice, however, French and Québec case law use the two terms
interchangeably.10 Further, it seems that the term “force majeure” term is
more frequently used than the term “fortuitous event”.11
Under French, Québec and Greek law, three elements need to be present
for an event to qualify as force majeure: the harm causing event needs to be
external, unforeseeable and irresistible. These elements of the force majeure
concept are, in principle, cumulative.12
“External” or outside the “debtor’s sphere of activities or control” 13 are,
for instance, “acts of God”, “acts of war” or “authority of law” liability exemp-
tions which are very frequently encountered in ocean and land transport of

Nomos, Athens Court of Appeals, 2002, No. 1022/2002 (320622) Nomos. Greek Civil Code Art.
656 refers to force majeure (ανωτερα βια) in employment contracts.
8 Philippe LE TOURNEAU, Droit de la responsabilité et des contrats, Dalloz, 6th ed. (2006-
2007), 482-483.
9 Id.
10 France: François TERRE / Philippe SIMLER / Yves LEQUETTE, Droit civil – les obligations,
Dalloz, 9th ed. (2005), 568-569. Québec: BAUDOUIN / JODIN, Les obligations, Éditions Yvon Blais,
6th ed. (2005), 938.
11 LE TOURNEAU, supra note 8.
12 France: Christian LARROUMET, Droit civil – les obligations – le contrat, Economica, 5th
ed. (2003), 830 (“Irresistible, insurmountable, inevitable are deemed synonymous terms”).
Québec: BAUDOUIN / JODIN, supra note 10. Greece: Supreme Court (2003), No. 67/2003 (320126)
Nomos. However, the analysis that follows proves the relativity of the concept based on these
three elements.
13 France: TERRE / SIMLER / LEQUETTE, supra note 10; Cass. Com. (6 Mar. 2001), No. 98-
21009 Legifrance. Québec: BAUDOUIN / JODIN, supra note 10, 941; Jean PINEAU, Le contrat de
transport terrestre, maritime et aérien, Les Éditions Thémis (1986), 53-54. Québec: Métal Recyclé
(FNF) Inc. v. Transnat Express Inc. [2005] J.Q. no 17323 (QCSC) Quicklaw; Crédit Commercial de
France v. Montréal (Ville) [2001] J.Q. no 2562 (QCCA) Quicklaw. In Greece, courts refer to an
“unforeseeable external (εξωτερικο) event which cannot be avoided even by taking measures of
utter diligence and prudence”: Supreme Court (2003), No. 67/2003 (320126) Nomos.

Rev. dr. unif. 2007 103


Marel Katsivela

goods contracts.14 In this way and contrary to force majeure clauses, an


inherent defect of the goods under the control of the debtor does not generally
qualify as force majeure since it is not deemed to be external to the debtor’s
sphere of activities or control.15 Following the same reasoning, the debtor’s
agents’ acts cannot qualify as force majeure.16
However, in certain instances, even events that are normally deemed
internal to the debtor’s sphere of activities or control have been qualified as
force majeure by civil law courts.17 In this way, a strike of employees has
been held to qualify as force majeure under French, Québec and Greek law.18
Such a conclusion may be justified by the fact that civil law cases and doctrine
have not always regarded the externality of the force majeure event as a
substantive element of the force majeure concept distinct from unforeseen-
ability and irresistibility.19 In defining force majeure, the abovementioned
Québec Civil Code Article 1470 refers to an “unforeseeable and irresistible
event, including external causes”. This phrase suggests that the external

14 Québec: PINEAU, supra note 13, 206. France: TERRE / SIMLER / LEQUETTE, supra note 10,
573.
15 France:TERRE / SIMLER / LEQUETTE, supra note 10, 569 and Cass. 3e civ. (2 Apr. 2003), No.
01-17724 Legifrance. Québec cases treat force majeure and inherent defect as separate concepts:
Poissons Frais des Îles Inc. v. Christian Larocque Services [2003] J.Q. no 12681 (QCCt) Quicklaw,
CGU; Compagnie d’Assurances du Canada v. Guindon Desjardins [2006] J.Q. no 453 (QCSC)
Quicklaw.
16 France: CA Toulouse, 1e ch. civ. (18 June 2001), No. 2000/00864 Legifrance. Québec:
Rose v. Société de Transport de la Communauté Urbaine de Montréal [1996] A.Q. no 688 (QCSC)
Quicklaw; Goupil v. Centre Hospitalier Universitaire de Québec [2001] J.Q. no 3343 (QCSC)
Quicklaw.
17 France: LARROUMET, supra note 12, 830. Québec:BAUDOUIN / JODIN, supra note 10, 938.
18 France: Cass. soc. (11 Jan. 2000), No. 97-18215 Legifrance, Cass. soc. (7 Apr 1999), No.
97-40446 Legifrance. Québec: Atlantic Paper Stock Ltd. v. St. Anne-Nackawic Pulp and Paper Co.
[1975] A.C.S. no 46 (SCC) Quicklaw, where it is stated that a strike may constitute force majeure if
it is not due to the person who claims it and is irresistible and unforeseeable. In BAUDOUIN / JODIN,
supra note 10, 938, the author notes that the same reasoning has been applied to sickness and
unemployment. Under Greek law a strike or any interruption of employment may constitute a
force majeure event if it is due to a natural cause or other unforeseeable event which affects the
relationship between the employer and the employee, is irresistible by measures of utter diligence
and prudence and is not attributed to the employer: Supreme Court (2004), No. 1303/2004
(364445) Nomos.
19 France: LE TOURNEAU, supra note 8, 485; Maurice TANCELIN, Des obligations: actes et
responsabilités, 6th ed. (1997), 408, defines force majeure as an unforeseeable and irresistible
event. Québec: BAUDOUIN / JODIN, supra note 10, 942. The author admits, however, that if the
force majeure event is not external to the debtor it will be more difficult to convince the court that
it was unforeseeable and irresistible.

104 Unif. L. Rev. 2007


Contracts: Force Majeure Concept or Force Majeure Clauses?

element may rightfully be treated as an additional but not as an indispensable


element of the force majeure concept.
Other than being external, the civil law force majeure concept requires
the presence of an unforeseeable and an irresistible event. If the debtor could
have foreseen the event at the time of contracting he should have provided for
it in the contract. Unforeseeability of the force majeure event has to be
assessed at the time of the contract formation.20
Even though it is true that all catastrophic events, even wars or floods, can
be foreseen by the parties at the time of contracting, what we are really looking
for in this regard is the accompanying elements of abnormality, surprise and
rarity of the event.21 In this sense, causes of damage such as wars, fires, thefts,
sickness, ice storms (tempête de verglas) are not force majeure events but can
qualify as such based on the circumstances of each case.22
Initially, French courts required an event to be absolutely unforeseeable
in order to qualify as force majeure.23 Today, however, Québec, French and
Greek case law do not require absolute unforeseeability but reason on the
basis of reasonable measures (objective standard) taken to foresee the harm
causing event.24 In this regard, it has been held that the theft of transported
goods or of passenger’s jewels is foreseeable by the carrier and does not, in
principle, constitute force majeure.25

20 France:TERRE / SIMLER / LEQUETTE, supra note 10, 569-572. Québec: Halpin v. Lauzon
[2000] J.Q. no 1316 (QCCt) Quicklaw.
21 France: TERRE / SIMLER / LEQUETTE, supra note 10, 570, Cass. crim. (8 Sep. 1998), No. 97-
85884 Legifrance. Québec: Meubles Napert Ltée v. Ste-Marie de Beauce (Ville de), [2006] J.Q. no
1771 (QCSC) Quicklaw stated that if all events were foreseeable, the force majeure concept would
be voided of its very substance.
22 Québec: BAUDOUIN / JODIN, supra note 10, 943-944. In this way, the author notes that
the extraordinary 1998 ice storm in Québec was deemed to be a force majeure event. Also, see
Harrison v. Cuirs Sal-Tan Inc [2000] J.Q. no 1640 (QCSC) Quicklaw. France: French case Cass. 1e
civ. (29 May 1974), No. 73-10527 Legifrance stated that military service may constitute a force
majeure event if all elements of the force majeure concept are present. On theft, see infra note 26.
23 TERRE / SIMLER / LEQUETTE, supra note 10, 769.
24 France: Cass. 2e civ. (24 May 2006), No. 04-20550 Legifrance. Québec: Meubles
Napert Ltée v. Ste-Marie de Beauce (Ville de), supra note 21. In Métal Recyclé (FNF) Inc. v.
Transnat Express Inc., supra note 13, the criterion adopted to assess unforeseeability was that of an
average person. In Greece, the Piraeus Court of Appeals (Maritime Section) (2004), No. 682/2004
(396202) Nomos held that the weather conditions in a vessel collision case were foreseeable
because they were not unusual for the period of time when the facts took place.
25 France: Cass. 1e civ. (3 July 2002), No. 99-20217 Legifrance. Québec: in Métal Recyclé
(FNF) Inc. v. Transnat Express Inc., supra note 13, the court held that theft of goods transported by

Rev. dr. unif. 2007 105


Marel Katsivela

The third element of the force majeure concept, the irresistibility of the
harm causing event, refers to an event that renders performance under the
contract impossible and not merely onerous or burdensome.26 Greek law
moves in the same direction and in the 1991 case No. 614/1991 (38674), the
Piraeus trial court concluded that war constitutes a force majeure event when
it renders performance of an employment contract impossible and not merely
burdensome. Further, impossibility to perform must be permanent and not
temporary.27 Finally, unlike common law jurisdictions, if performance is
rendered impracticable or if there is hardship, French courts refuse relief.28
Under French and Québec law, the irresistibility element of the force
majeure concept requires the debtor to take measures that a reasonable
person (objective standard) would have taken against the event.29 Greek case
law, however, consistently refers to “incidents which cannot be avoided by
acts of utter diligence and prudence” of the debtor.30 “Utter diligence and

the carrier is not a force majeure event except in extraordinary circumstances. Greece: Athens
Court of Appeals (1987), No. 1432/1987 (64296) Nomos.
26 France: There is no force majeure if performance of the contract is not impossible.
TERRÉ / SIMLER / LEQUETTE, supra note 10, 571-572 ; LE TOURNEAU, supra note 8, 483. Québec:
BAUDOUIN / JODIN, supra note 10, 940; in Métal Recyclé (FNF) Inc. v. Transnat Express Inc., supra
note 13, the Québec Supreme Court held that in the presence of force majeure, performance must
be rendered absolutely impossible, not relatively impossible like in the case of a simple difficulty
to perform; see also Meubles Napert Ltée v. Ste-Marie de Beauce (Ville de), supra note 21.
27 France: LARROUMET, supra note 12, 830 and Cass. soc. (3 Nov. 1977), No. 76-40747
Legifrance. Québec: Productions Claude Fortier Inc. v. Productions SDA Ltée [1997] AQ no. 506
(QCCt), Quicklaw, and BAUDOUIN / JODIN, supra note 10, 940-941. The author further notes that
temporary impossibility may qualify as force majeure only in the case where the moment of the
performance was deemed of essence to the contract.
28 Joseph PERILLO, “Force Majeure and Hardship under the UNIDROIT Principles of Interna-
tional Commercial Contracts”, 5 Tulane Journal of International & Comparative Law (1997), 5, 7.
29 France: The debtor should act like a “bon père de famille“ or “un homme
diligent“.TERRÉ / SIMLER / LEQUETTE, supra note 10, 571, Cass. 2e civ. (24 May 2006), No. 04-20550
Legifrance. Québec: BAUDOUIN / JODIN, supra note 10, 939; Québec Métal Recyclé (FNF) Inc. v.
Transnat Express Inc., supra note 13, where the criterion adopted to assess impossibility was that
of an average person; Crédit Commercial de France v. Montréal (Ville), supra note 13; St Timothée
v. Hydro-Québec [1999] J.E. 99-1804 (Qué.S.C.) Quicklaw.
30 Supreme Court (2006), No. 908/2006 (397823) Nomos ; Supreme Court (2005), No.
61/2005 (383500) Nomos; Supreme Court (2004), No. 937/2004 (361078) Nomos; Supreme Court
(2003), No. 67/2003 (320126) Nomos; Piraeus Court of Appeals (2005), No. 289/2005 (382874)
Nomos; Piraeus Court of Appeals (Maritime Section) (2004), No. 682/2004 (396202) Nomos. In the
latter case, the court referred to incidents that cannot be avoided by “measures of extraordinary
diligence and prudence”.

106 Unif. L. Rev. 2007


Contracts: Force Majeure Concept or Force Majeure Clauses?

prudence” is assessed objectively 31 and clearly sets a higher standard of care


than the mere reasonableness which we find in French and Québec cases.
Finally, what is certain in all the aforementioned jurisdictions is that the
presence of a force majeure event will not absolve a contracting party from
performing if there is fault on its part.32
The irresistibility of the force majeure event is deemed today to be the
most important element of the civil law force majeure concept, at least under
French case law.33 Due to this fact, there is doctrinal and case law support for
the view that unforeseeability needs to be examined with respect to the
irresistibility of the harm causing event.34 This confirms the line of cases that
we have already examined with respect to the external element of the force
majeure concept where civil law courts and doctrine have required only the
presence of one or two elements of the force majeure concept to qualify an
event as force majeure.35 In practice, therefore, it is difficult to set clear-cut
principles to define the civil law force majeure concept.36
Further, the highly factual determination of the external, unforeseeable
and irresistible character of the civil law force majeure concept leaves judges
a considerable margin of discretion in assessing the presence of force
majeure.37 This accentuates the lack of clarity in determining the contours of
the civil law concept.38 Finally, the diverse judicial interpretations of the force

31 In Piraeus Court of Appeals (Maritime Section) (2004), No. 682/2004 (396202) Nomos,
the court referred, in this regard, to the standard of an “average prudent person”.
32 Québec: on debtor’s fault: Royal & Sunalliance du Canada v. Cam-Nord St-Félix Inc.
[2006] J.Q. no 5258 (QCCt) Quicklaw; Québec Métal Recyclé (FNF) Inc. v. Transnat Express Inc.,
supra note 13. France: CA Paris, 21 Mar. 2002, No. 2000/05210 Legifrance. Greece: Supreme
Court (2002), No. 904/2002 (314002) Nomos, and Piraeus Court of Appeals (Maritime Section)
(2004), No. 682/2004 (396202) Nomos.
33 France: LE TOURNEAU, supra note 8, 485, BAUDOUIN / JODIN, supra note 10, 938. See
also Boucherville (Ville de) v. Samuel Bélisle et autres (1977) CA 91, 94 (Q.C.A.).
34 France: LE TOURNEAU, supra note 8, 485, referring to case Cass Com. (28 Apr. 1998), D.
1999, 469, Bull.Civ. IV, no. 141, where the court held that force majeure existed in the presence of
an irresistible but foreseeable event. See also LARROUMET, supra note 12. Québec: BAUDOUIN /
JODIN, supra note 10, 938, where the author notes that whereas, in principle, force majeure
elements are cumulative, there are cases where courts qualify an event as force majeure on the
basis of one of the three elements; see also Boucherville (Ville de) v. Samuel Bélisle et autres,
supra note 33. Greece: in Piraeus Court of Appeals (Maritime Section) (2004), No. 682/2004
(396202) Nomos, the court noted that foreseeable bad weather conditions cannot be irresistible.
35 Supra notes 33, 34 and accompanying text.
36 BAUDOUIN / JODIN, supra note 10, 938, 942.
37 Meubles Napert Ltée v. Sté-Marie de Beauce (Ville de), supra note 21.
38 BAUDOUIN / JODIN, supra note 10, 943 on the lack of clarity.

Rev. dr. unif. 2007 107


Marel Katsivela

majeure elements in the different civil law jurisdictions add to the lack of
coherence present at the domestic level.39
In practice, parties can contractually define force majeure events through
the use of force majeure clauses. Such clauses may deviate from the legal
requirements of the force majeure concept.40 We will examine force majeure
clauses later on.41 It should be noted, however, that due to their contractual
nature, force majeure clauses may be wider in scope and/or different than the
more rigid civil law force majeure concept or clauses incorporating the latter
into a contract.42 Consequently, the debtor may be able to be excused of
performance more easily under a force majeure clause than under the civil
law force majeure concept.

III. – FORCE MAJEURE UNDER COMMON LAW

Today, common law uses the term “force majeure” but ignores the concept of
force majeure as perceived in civil law jurisdictions.43 In reality, there is a
common law force majeure doctrine which has developed over the years,
starting off in the 19th century as a contractual synonym of the common law
doctrine of legal impossibility and moving, with time, in the direction of
impracticability.44 In England and the United States impossibility and imprac-
ticability are associated with the doctrine of frustration. A contract is deemed
frustrated when a supervening event renders its performance impossible or at
least so different from that contemplated that it would not be reasonable to

39 See, e.g., supra note 30 and accompanying text on Greek law and the requirement of
“utter diligence and prudence” with respect to the irresistibility element of the force majeure concept.
40 Québec: BAUDOUIN / JODIN, supra note 10, 938-939. France: Philippe MALAURIE /
Laurent AYNES, Droit civil les obligations, 2nd ed. (2005), 500-501. The author notes, in this respect,
that the force majeure concept is not “d’ordre public” (of a public policy character). It can,
therefore, be contracted out of.
41 Infra under IV: “Force Majeure Clauses”.
42 Québec: BAUDOUIN / JODIN, supra note 10, 938-939; Entreprises Rioux & Nadeau Inc. v.
Société de Récupération [2000] J.Q. no 1545 (QCCA) Quicklaw. France: MALAURIE / AYNES, supra
note 40, 500-501; G.H. TREITEL, Frustration and Force Majeure, Sweet & Maxwell ed. (1994), 434
on French law.
43 Statement made with respect to English law. Michel POURCELET, Le transport maritime
sous connaissement (1972), 131.
44 P.J.M. DECLERQ, “Modern Analysis of the Legal Effects of Force Majeure Clauses in
Situations of Commercial Impracticability” 15 Journal of Law& Commerce (1995), 213, 214. The
authority English cases on impossibility and impracticability are Taylor v. Caldwell, 32 LJQB 164
(1836) and Krell v. Henry 2 K.B. 740 (1903), respectively.

108 Unif. L. Rev. 2007


Contracts: Force Majeure Concept or Force Majeure Clauses?

hold the parties bound by the contract.45


Frustration is said to be the common law equivalent of the civil law force
majeure concept.46 However, the two concepts are not identical. One of the
main characteristics of the civil law concept of force majeure is that it applies
to situations where the performance of the contract is impossible, not merely
something different from what was originally contemplated by the parties as is
the case of the frustration doctrine.47 Based on the scope of the frustration
doctrine, it has been said that the civil law force majeure concept is far
narrower than that of frustration.48
Like the civil law force majeure concept, the common law doctrine of
frustration is not uniformly interpreted across common law jurisdictions and,
even at the domestic level, it is not always certain whether a specific event
will lead to frustrating a contract; the very fact that these concepts are not
carved in stone but are in flux was one of the ingredients of functional harmon-
isation as achieved by the UNIDROIT Principles of International Commercial
Contracts (infra V).49 Moreover, the common law standard of recovery under
the frustration doctrine is quite strict as it applies only within “very narrow
limits”.50 On the contrary, in a force majeure clause the parties have the ability
to deal with problems caused by changed circumstances in their own way.51

IV. – FORCE MAJEURE CLAUSES

A force majeure (superior force) clause allows a party to terminate its obli-
gations under a contract because of the occurrence of an event described in
the clause.52 Force majeure clauses that excuse a breaching party from

45 O’CONNOR, supra note 1.


46 Id.
47 Caslav PEJOVIC, “Civil Law and Common Law: Two Different Paths Leading to the
Same Goal”, <http://www.upf.pf/recherche/IRIDIP/RJP/RJP7/16Pejovic.doc> (visited 5 Jan. 2007).
The article contains a concise and right to the point comparison of the frustration doctrine and the
civil law force majeure concept.
48 TREITEL, supra note 42, 433.
49 Id. at 263-264, 427-428. The author compares the English and US concepts of
impracticability, noting similarities and differences. PERILLO, supra note 28, 6-9.
50 TREITEL, supra note 42, 427-428.
51 DECLERQ, supra note 44, 229.
52 Larry A. DIMATTEO / Lucien J. DHOOGE, International Business Law, a Transactional
Approach, Thomson West ed., 2nd ed. (2004), 134.

Rev. dr. unif. 2007 109


Marel Katsivela

liability for non-performance are common in most national legal systems 53


and are almost invariably included in international business contracts. They
refer to extraordinary events independent of the parties’ will that cannot be
foreseen or averted by them with due diligence, being beyond their control
and preventing the contracting party from fulfilling the obligation undertaken
in the contract.54 They qualify as such either by the draftsman or by the
courts. Two of the earliest English cases that used the French term “force
majeure” with respect to a force majeure clause are Lebeaupin v. Crispin and
Matsoukis v. Priestman & Co.55
In both civil and common law jurisdictions, contracting parties are free to
define the contours of force majeure clauses in their contracts and those
contours dictate the application, effect and scope of force majeure.56 Indeed,
if contracting parties have contemplated what constitutes a force majeure
event and what its consequences may be, the courts will apply the logic of the
parties and will not consider common law or civil law doctrines.57 The intent
of the parties governs, therefore, the enforcement and interpretation of force
majeure clauses and courts are not at liberty to rewrite the contract or
interrupt it in a manner which the parties never intended. In the US case R & B
Falcon Drilling Co. v. Am. Exploration Co.58 the court noted: “Contractual
terms are controlling regarding force majeure with common law rules merely
filling in gaps left by the document”. The same is true in civil law jurisdictions
where force majeure clauses can adopt a different and/or broader meaning
than the concept of force majeure.59
In the absence of a force majeure clause, parties have to rely on the
common law principles of frustration, impossibility and impracticability or the
civil law force majeure concept.60 Because of the lack of clear-cut principles

53 Id. at 135.
54 Id.
55 2 K.B. 714 (1920) for the former and 1 K.B. 681 [1915] for the latter.
56 US: Brian A. BLUM, Contracts, Aspen Law and Business, 2nd ed. (2001), 443. England:
TREITEL, supra note 42, 415. For common law in general see O’CONNOR, supra note 1. Québec:
BAUDOUIN / JODIN, supra note 10, 945, C.Civ. Art. 1693.
57 TREITEL, supra note 42, 415, O’CONNOR, supra note 1, Québec case Entreprises Rioux &
Nadeau Inc. v. Société de Récupération, supra note 42.
58 154 F. Supp. 2nd 969 (S.D. Tex. 2000).
59 Supra note 42 and accompanying text.
60 England: TREITEL, supra note 42, 415. US: Demrie L. WILKINSON, “In the Wake of a
Hurricane. The Lessons of a Force Majeure Clause – Oh When the Saints …“,

110 Unif. L. Rev. 2007


Contracts: Force Majeure Concept or Force Majeure Clauses?

governing these civil law and common law concepts, the need for contractual
force majeure clauses is evident.
In common law contracts, most force majeure clauses contain a list of
events and a general catchall provision.61 At present, there is no uniform set
of events that constitutes force majeure.62 However, common events of force
majeure include “acts of God”, which cover floods, fire, earthquakes,
tornadoes, hurricanes, severe winds and other acts not attributable to man in
general, and acts of government, which include war, both civil and overseas,
insurrection, and acts preventing one side or both sides from performing
under their contract, such as embargoes.63 Civil law contracts are, in
principle, more succinct since the tendency is not to clarify or embellish
established concepts such as force majeure.64
Language often included in force majeure clauses is that these cannot be
invoked when the events they describe are “reasonably within the control of
either party” 65 or, inversely, they can be invoked when the events they
describe are “beyond the control of the party affected…”.66 These phrases set
a due diligence standard of care that mandates taking objectively reasonable
steps to prevent the force majeure event.67 This reminds us of the irresistibility
element of the civil law force majeure concept which is assessed in a similar
way by civil law courts. Contrary to the civil law force majeure concept,

http://www.hklaw.com/Publications/Newsletters.asp?IssueID=648&Article=3392 (visited 5 Jan.


2007). Civil law: supra note 43 and accompanying text.
61 DECLERQ, supra note 44, 232. An example of a catchall provision would be, for
instance, the phrase: “… or other causes beyond the control of the party affected, whether or not
similar to those enumerated” that we find in the English case Mamidoil-Jetoil Greek Petroleum
Company SA & Anor v. Okta Crude Oil Refinery AD, EWHC 2210 (2002).
62 WILKINSON, supra note 60, under “the concept of force majeure”.
63 Id.
64 John D. CROTHERS, “Recent Experience in Project Finance and Privatization in Africa”,
809 PLI/Comm (2000), 519, 531. See, in this regard, Canada Starch Co. v. Gill & Dufus (Canada)
Ltd. (C.A.Q.) [1990] A.Q. No 1901 (QCCA) Quicklaw. In this case the force majeure clause simply
read: “seller not responsible for delay or non-shipment due to Acts of God, Military operations,
War, Fire, Strikes and other Labour disagreements, Action by Government or their agents, delay
by Carriers or any other cause beyond the reasonable control of Seller. Disputes to be settled
amicably between Buyer and Seller.”
65 DECLERQ, supra note 44, 238.
66 Robert E. COLTIN, “Force Majeure: Does it Really Work?”, 14 Real Estate Law Journal
(1985), 279, 279-280; Canada Starch Co. v. Gill & Dufus (Canada) Ltd., supra note 65.
67 US: DECLERQ, supra note 45, 238, 238-239, basing the statement on case law. England:
Mamidoil-Jetoil Greek Petroleum Company SA & Anor v. Okta Crude Oil Refinery AD, supra note
62. Québec: Canada Starch Co. v. Gill & Dufus (Canada) Ltd., supra note 64.

Rev. dr. unif. 2007 111


Marel Katsivela

however, force majeure clause events may appropriately be construed either


actually to prevent performance or render performance impracticable.68
Moreover, force majeure events enumerated in force majeure clauses may not
be external to the debtor’s sphere of activities or control and may, therefore,
include inherent vice contrary to the general requirements of the civil law
force majeure concept.69
The unforeseeability of the force majeure clause events has developed as
a requirement of contingency under common and civil law.70 In this way, if
an event is reasonably foreseeable by the contracting parties, failure to
provide for it in the force majeure clause leads to assumption of the event.71
The reasonableness standard also resembles the foreseeability test of the civil
law force majeure concept.72 However, to avoid discrepancies in the judicial
treatment of foreseeability some authors propose an explicit rejection of the
foreseeability test in the force majeure clause.73
Force majeure clauses should be construed strictly.74 In this way, if the
party invoking the force majeure clause is at fault in either inducing or
avoiding the force majeure event, it will not benefit from the clause.75
Nonetheless, the latter may exempt certain faults or negligent acts of the
parties.76

68 US: DECLERQ, supra note 44, 241-243. England: TREITEL, supra note 42, 266. Québec:
Canada Starch Co. v. Gill & Dufus (Canada) Ltd., supra note 64. For the civil law force majeure
concept and impracticability see supra under II.
69 River Terminals Corp. v. U.S., 121 F. Supp. 98 (E.D.La 1954), where the force majeure
clause excused non performance in case of “loss or damage arising from inherent defect, quality
or vice of the cargo”; Allen N. Spooner & Son, Inc. v. Connecticut Fire Ins. Co., 314 F.2d 753 (2nd
Cir. 1963) on marine insurance policies. On inherent defect and civil law see supra under II.
70 US: DECLERQ, supra note 44, 236. Québec: Canada Starch Co. v. Gill & Dufus (Canada)
Ltd., supra note 64.
71 US: DECLERQ, supra note 44, 236. Québec: Hydro-Québec v. Churchill Falls (Labrador)
Corp.[1985] A.Q. no 43 (QCCA) Quicklaw.
72 See supra under II.
73 DECLERQ, supra note 44, 237, 248 (1995). In the US case Phibro Energy, Inc. v. Empresa
de Polimeros de Sines Sarl, 720 F. Supp. 312 (S.D.N.Y. (1989)), the force majeure clause did not
provide whether or not the events therein contained should be unforeseeable. The court
researched parties intent and found that parties agreed that force majeure clause events needed to
be unforeseeable.
74 UK: TREITEL, supra note 42, 436s. France: Cass. comm. (22 Mar. 1994), No. 92-10452,
Legifrance.
75 US: DECLERQ, supra note 44, 239. UK: TREITEL, supra note 42, 436s. Québec: Hydro-
Québec v. Churchill Falls (Labrador) Corp., supra note 71.
76 DECLERQ, supra note 44, 248.

112 Unif. L. Rev. 2007


Contracts: Force Majeure Concept or Force Majeure Clauses?

When well drafted, force majeure clauses maximise the protection of


contracting parties and minimise the likelihood of unintended consequences.
To be well drafted, force majeure clauses must be custom drafted.77
Unfortunately, most contracts, domestic or international, utilise vaguely
worded standard excuse or exemption clauses.78 This leaves courts a great
margin of discretion in interpreting parties’ intent. In this way, a US court
rejected plaintiff’s motion for summary judgment because the force majeure
clause was susceptible to more than one reasonable construction regarding
the effect of the force majeure event.79 This is also true in civil law
jurisdictions where, as we have noted, force majeure clauses tend to be more
succinct. In the 1989 French Supreme Court case No. 88-14315, the court
rejected appellant’s claim in deciding that an interruption in the electricity
supply was covered by the force majeure clause. The court based its decision
on parties’ intent in drafting the force majeure clause which was vaguely
worded as follows:
Parties accept that electricity supply remains, despite the precautions taken,
subject to risks which may vary based on the location; consequently, there may
be interruptions which, within certain limits as to duration or number that may
vary in every case, should be assimilated to force majeure events.80

V. – FORCE MAJEURE AND INTERNATIONAL CONTRACTS

In drafting force majeure clauses in international contracts, contracting parties


may have recourse to the International Chamber of Commerce (ICC) 81 model
force majeure clause 2003.82 This clause, which can be incorporated by
reference into a contract, provides that the party invoking the clause must
prove that.83

77 DIMATTEO / DHOOGE, supra note 52, 135.


78 Id. at 136. See also O’CONNOR, supra note 1.
79 Phibro Energy, Inc. v. Empresa de Polimeros de Sines Sarl, supra note 73.
80 “Les parties reconnaissent que la fourniture de courant reste, malgré toutes les
précautions prises, soumise à des aléas, variables d’ailleurs suivant les régions et les lieux
desservis, et qu’ainsi peuvent se produire des interruptions qui, dans certaines limites en durée et
en nombre, variables dans chaque espèce, doivent être assimilées à des cas de force majeure”.
See also Cass., comm. (22 Mar. 1994), No. 92-10452 Legifrance.
81 See ICC (International Chamber of Commerce), What is the ICC?,
<http://www.iccwbo.org/id93/index.html> (visited 24 Apr. 2007).
82 ICC Publication No. 650, “Force Majeure and Hardship” (2003). See also DIMATTEO /
DHOOGE, supra note 52, 136.
83 For the following three elements see ICC Publication No. 650, supra note 82.

Rev. dr. unif. 2007 113


Marel Katsivela

(a) failure to perform was caused by an impediment beyond its


reasonable control; and
(b) it could not reasonably have been expected to have taken the
occurrence of the impediment into account at the time of the
conclusion of the contract; and
(c) it could not reasonably have avoided or overcome the effects of the
impediment.
These are cumulative, not alternative conditions. The ICC model clause
also contains a long list of force majeure events which includes “acts of
terrorism”, a force majeure event that was not present in previous versions of
the clause.84 Contracting parties can add or remove events to/from the list
provided in the clause.85 Unless proven otherwise or agreed otherwise in the
contract, the occurrence of any of the force majeure events enumerated in the
ICC model clause creates a presumption that the abovementioned conditions
(a) and (b) are met.86 For instance, unless proven otherwise or agreed
otherwise in the contract, a party who invokes the “acts of terrorism” force
majeure event under the ICC model clause is presumed to have failed to
perform under the contract due to an impediment beyond its reasonable
control and which it could not have reasonably foreseen at the time of the
conclusion of the contract. However, this party must still prove condition (c)
of the ICC model clause, that is, that it could not reasonably have avoided or
overcome the effects of the acts of terrorism.
Conditions (b) and (c) of the ICC model clause clearly approximate the
unforeseeability and irresistibility elements of the civil law force majeure
concept which, as mentioned, are also present, either implicitly or explicitly,
in contractual force majeure clauses. Contrary to the civil law force majeure
concept, however, and in conformity with contractual force majeure clauses,
condition (a) of the ICC model clause does not seem to require an event
external to the “debtor’s sphere of activities or control” to justify the presence
of a force majeure event.87 Moreover, the list of force majeure events
provided by the ICC model clause may be contractually modified by the
parties like in the case of force majeure clauses.88

84 Such as the ICC model force majeure clause 1985. See ICC Publication No. 650, supra
note 82.
85 Id.
86 Id.
87 Id.
88 Id.

114 Unif. L. Rev. 2007


Contracts: Force Majeure Concept or Force Majeure Clauses?

For the rest, the ICC model clause provides that the party invoking the
force majeure clause will be excused of performing under the contract
provided that it notified the other party promptly of the force majeure event.89
Where the force majeure impediment has a temporary effect, contractual
obligations will only be suspended during the time of the impediment and the
party invoking the clause has to notify the other party “as soon as the
impediment or listed event ceases to impede performance.” 90
The term “impediment” used in the ICC model clause does not mean
inconvenience, more costly performance or difficulty to perform.91 Due to the
fact that: (a) a force majeure clause generally does not recognise changes in
circumstances that result in mere hardship 92 and (b) the unwillingness of
courts and legislatures in many countries to assist parties in modifying their
contracts to fit fundamentally changed circumstances,93 the parties may
expand a clause to include events that make performance not impossible, but
unduly costly. Such a clause is referred to as a hardship clause.
The ICC has elaborated a model hardship clause 2003 which can be
incorporated by reference into a contract.94 This clause obligates parties to
negotiate “alternative contractual terms” and, therefore, resort to contract
renegotiation in the event that continued performance of the contract
becomes “excessively onerous” because of an event beyond the reasonable
control of the parties, which could not reasonably have been foreseen at the
time of the conclusion of the contract, and which could not reasonably have
been avoided or overcome.95 It also provides that if parties are unable to
negotiate alternative contractual terms, the party invoking the hardship clause
may terminate the contract.96
The parties may provide a list of circumstances that result in hardship in
order to avoid uncertainty.97 However, it is advised that caution should be
exercised in this regard since any such listing will be incomplete by necessity

89 Id.
90 Id.
91 DIMATTEO / DHOOGE, supra note 52, 137.
92 Id. and supra under II.
93 Joern RIMKE, “Force majeure and hardship: Application in international trade practice
with specific regard to the CISG and the UNIDROIT Principles of International Commercial
Contracts”, <http://www.cisg.law.pace.edu/cisg/biblio/rimke.html> (visited 24 Apr. 2007).
94 ICC Publication No. 650, supra note 82.
95 Id. for the exact wording. See also DIMATTEO / DHOOGE, supra note 52, 137.
96 Id.
97 ICC Publication No. 650, supra note 82.

Rev. dr. unif. 2007 115


Marel Katsivela

given the unforeseeable nature of many hardships.98 Furthermore, any list of


such occurrences may be deemed exclusive without language indicating that
such a list is only demonstrative rather than exhaustive.99
The ICC force majeure clause is to be distinguished from the ICC hardship
clause in that the two clauses take effect in different circumstances and have
different consequences.100 In effect, force majeure clauses do not refer to
circumstances that result in mere hardship and have the effect of excusing non
performance in the absence of any obligation to negotiate “alternative
contractual terms”. Authors have suggested that for the sake of uniformity,
simplicity and efficiency, contracts should contain only one clause which will
cover both force majeure and hardship circumstances.101
It is the UNIDROIT Principles of International Commercial Contracts
(hereinafter “UNIDROIT Principles”) 102 Article 7.1.7 on “Force Majeure” that
provided a basis for the drafting of the ICC model force majeure clause
2003.103 The UNIDROIT Principles’ principal objective is to restate or elaborate
general principles of contract law, thus reflecting all the major legal systems of
the world.104 The UNIDROIT Principles were revised in 2004.
The Principles are general principles of contract law that apply to all types
of international contracts and are intended to provide guidance to lawyers and
contracting parties from different jurisdictions. They are not, therefore, binding
as a domestic law of international contracts.105 However, they may be incur-
porated into a contract by the parties. Albeit non-binding and even if they are
not incorporated into a contract, judges and arbitrators have applied the
UNIDROIT Principles as a means of interpreting and supplementing inter-
national uniform law instruments and domestic law.106 Supplementing an
international instrument with the UNIDROIT Principles has the additional
advantage of enhancing consistency and fairness in the adjudication of inter-

98 Id.
99 Id.
100 Id. Hardship clauses will not be examined in detail in the present paper.
101 RIMKE, supra note 93.
102 About UNIDROIT <http://www.UNIDROIT.org/english/presentation/main.htm> (visited
27 Apr. 2007).
103 ICC Publication No. 650, supra note 82.
104 M. Joachim BONELL, An International Restatement of Contract Law, Transnational
Publishers, 3rd ed. (2005); RIMKE, supra note 93.
105 DIMATTEO / DHOOGE, supra note 52, 235-236.
106 Id. at 236.

116 Unif. L. Rev. 2007


Contracts: Force Majeure Concept or Force Majeure Clauses?

national commercial disputes.107 In drafting a force majeure clause in an


international contract it is, therefore, very useful to know what the UNIDROIT
Principles provide in this regard.108
Article 7.1.7. entitled “Force Majeure” states:
(1) Non-performance by a party is excused if that party proves that the non-
performance was due to an impediment beyond its control and that it could not
reasonably be expected to have taken the impediment into account at the time of
the conclusion of the contract or to have avoided or overcome it or its
consequences.
(2) When the impediment is only temporary, the excuse shall have effect for
such period as is reasonable having regard to the effect of the impediment on the
performance of the contract.
(3) The party who fails to perform must give notice to the other party of the
impediment and its effect on its ability to perform. If the notice is not received by
the other party within a reasonable time after the party who fails to perform knew
or ought to have known of the impediment, it is liable for damages resulting from
such non-receipt.
(4) Nothing in this article prevents a party from exercising a right to terminate
the contract or to withhold performance or request interest on money due.
Paragraph (1) of this article adheres to the principle that the excuse force
majeure creates is general, except for the few important exceptions
concerning claims contained in paragraph (4): these include the right to
terminate the contract, withhold delivery, or request interest on money
due.109 In furtherance of this provision, it has been held that a deposit made
under a contract for the sale of cars later terminated due to a force majeure
event needs to be returned:110
While the Panel notes that the invasion and occupation of Kuwait might have
given rise to a hardship or force majeure situation that may have excused the
automobile dealer from his duty to deliver the new car, the event would not,
under principles of international commercial contract law, excuse him from his
alternative obligation to return the Claimant’s deposit.

107 Specifically on this point, cf. Eckart BRÖDERMANN, “The Growing Importance of the
UNIDROIT Principles in Europe – A Review in Light of Market Needs, the Role of Law and the 2005
Rome I Proposal”, Unif. L. Rev. / Rev. dr. unif. (2006), 749. Generally, RIMKE, supra note 93.
108 DIMATTEO / DHOOGE, supra note 52, 236.
109 Joern Rimke, RIMKE, supra note 93.
110 Governments and International Organizations with Claims Arising out of Iraqi Invasion
of Kuwait, Recommendation S/AC.26, United Nations Compensation Commission, Panel of
Commissioners (1997) <www.unilex.info>.

Rev. dr. unif. 2007 117


Marel Katsivela

Paragraphs 3 and 2 of Article 7.1.7 of the UNIDROIT Principles contain


similar provisions to those of the ICC model force majeure clause 2003 on
notification requirements and the suspension of contractual obligations
(temporary effects of force majeure), respectively.111
The language used to define force majeure under Paragraph 1 of Article
7.1.7 of the UNIDROIT Principles almost mirrors that of the ICC Force Majeure
Clause 2003.112 Both texts refer to: (a) an impediment beyond control (The
ICC model clause specifically refers to “reasonable control”); and (b) that
could not reasonably be expected to have been taken into account at the time
of the conclusion of the contract; and (the UNIDROIT Principles use the
conjunction “or”) (c) the effects of which could not reasonably have been
avoided or overcome by the party seeking the benefit of the force majeure.
The similar wording of the two texts can be easily explained by the fact that
one of the sources of inspiration in drafting the ICC model force majeure
clause 2003 was precisely Article 7.1.7 of the UNIDROIT Principles.113
The Arbitral Award of the Centro de Arbitraje de México of 30 November
2006 114 sheds light on Article 7.1.7 of the UNIDROIT Principles in a dispute
between defendant, a Mexican grower, and claimant, a US distributor,
concerning the breach of an exclusive production agreement under which the
defendant failed to produce and provide the claimant with specific quantities
of squash and cucumbers. Since the contract had expressly incorporated the
UNIDROIT Principles, the defendant claimed that rainstorms and flooding
caused by the meteorological phenomenon known as “El Niño”, a force
majeure event, caused the failure to deliver under the contract.
The Arbitral Tribunal held that the meteorological event “El Niño” was
undoubtedly beyond defendant’s control and that the defendant could not
have caused it in any way. However, its occurrence could have been foreseen
by the defendant since, due to his long-standing activity in the agricultural
sector, he had already experienced similar events in the past. An additional
reason for not giving effect to the force majeure provision of the UNIDROIT
Principles was that the defendant failed to give notice to the claimant of the
events in question and of their effect on its ability to perform as required by
Article 7.1.7(3) of the UNIDROIT Principles.

111 On the ICC model clause 2003 provisions, see supra under V.
112 Id..
113 Id.
114 Centro de Arbitraje de México (2006), <www.unilex.info>.

118 Unif. L. Rev. 2007


Contracts: Force Majeure Concept or Force Majeure Clauses?

It is interesting to note that the Arbitral Tribunal reasoned that if “El Niño”
had been unforeseeable, then the complete destruction of the defendant’s
installations it occasioned would have qualified this event as a “force
majeure” event since it would have been impossible for the defendant to
perform under the contract. This observation clearly demonstrates that the
expression “could not reasonably have avoided or overcome the effects” in
Article 7.1.7(1) is a cumulative and not an alternative condition of the force
majeure concept under this article. As a result, the conjunction “or” used
before this expression in the first paragraph of the UNIDROIT Principles” Article
7.1.7 should be read as “and”, since the latter clearly indicates that all three
abovementioned elements [(a)(b)(c)] of the force majeure concept should be
read together as in the case of the ICC model force majeure clause 2003.115

VI. – CONCLUSION

Force majeure clauses obey the principle of freedom of contract avoiding, in


this way, the rigidity of civil law and common law excuse doctrines. This is
why contracting parties have an interest in providing for such clauses in their
contracts. The present need for well-drafted force majeure clauses constitutes
the challenge that contracting parties, or rather, their attorneys need to meet in
drawing up contracts. Necessary readings providing useful guidelines in
drafting force majeure clauses in international contracts are the UNIDROIT
Principles of International Commercial Contracts and the ICC model force
majeure clause 2003.

JJJ

CONTRATS : UN CONCEPT DE FORCE MAJEURE OU DES CLAUSES DE FORCE MAJEURE ?


(Résumé)
Marel KATSIVELA (Professeur assistant, Faculté des Bahamas, University of West Indies).
Cet article compare le principe de force majeure dans les pays de droit civil (en
droit français, québécois et grec) et son équivalent que sont les clauses de force
majeure, dans les pays de common law (en droit des Etats-Unis d’Amérique et du
Royaume-Uni). L’objectif est de mieux comprendre le jeu des chefs d’exonération
dans ces deus systèmes juridiques et de souligner l’importance de veiller à une bonne
formulation des clauses de force majeure dans les contrats, notamment
internationaux. Les Principes d’UNIDROIT relatifs aux contrats du commerce

115 Supra under V.

Rev. dr. unif. 2007 119


Marel Katsivela

international et la Clause modèle ICC de force majeure 2003, sont examinés comme
bases en vue de la rédaction de telles clauses dans les contrats internationaux.
Sont traitées successivement : la force majeure en droit civil, la force majeure en
common law, les clauses de force majeure, la force majeure et les contrats
internationaux.

JJJ

120 Unif. L. Rev. 2007