„Force majeure” and „Act of God” are related concepts often used interchangeably, but they have distinct meanings. Both terms refer to unforseen events or circumstances, that are beyond the control of parties, and may prevent them from fulfilling their contractual obligations. They are designed to excuse, or delay performance of contractual obligations, when certain specified events occur. However, there are subtle differences between the two.
Force majeure clauses are explicitly included in contracts to define, and list the specific events, that would be considered force majeure events, including natural disasters, wars, strikes, government actions, and other events beyond human control. The terms of force majeure clauses are negotiable between the parties, and the inclusion of specific events, and the consequences of their occurence can vary from one contract to another.
„Act of God” is a more specific, and traditional term often used to refer to natural disasters or events, that are beyond human control. It typically refers to extraordinary, natural occurrences, such as earthquakes, floods, hurricanes, and other catastrophic events caused by natural forces. It may not always be explicitly included in contracts. Instead, it might be interpreted within the broader force majeure clause.
Sample Force Majeure clause
In the event that either party is unable to perform any of its obligations hereunder (other than the payment of money) due to a force majeure event, such party shall be relieved of that obligation to the extent and for the duration of the force majeure event.
For the purposes of the present Agreement, a ‘force majeure event’ means an event beyond the reasonable control of the affected party, which, by its nature, could not have been foreseen or, if it could have been foreseen, was unavoidable. Such events may include, but are not limited to, acts of God, war, terrorism, fire, flood, earthquake, governmental restrictions, pandemics, or any other similar event.
The party affected by the force majeure event shall promptly notify the other party of the occurrence of such an event and shall use reasonable efforts to mitigate the effects of the force majeure event. During the period of force majeure, the parties shall negotiate in good faith to find a mutually acceptable solution.
If the force majeure event continues for a period of 30 days or more, either party may terminate this Agreement by giving written notice to the other party.
Notwithstanding the above, a party shall not be excused from its obligations to make payments under this Agreement, even if such payments are affected by a force majeure event.