The term “force majeure” translates literally from French as superior force.[1] Black’s Law Dictionary defines force majeure as “[a]n event or effect that can be neither anticipated nor controlled.”[2] In the law, it is the term for a contract provision that allocates the risk of specified events including natural and man-made events. If that unlikely event occurs, the impacted party is excused from performance. [3] The events can include acts of God, floods, fires, earthquakes, tornadoes, etc., war, terrorism, government orders, embargoes, organized labor strikes, etc.
A force majeure clause relieves a party from performing contractual obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible.[4] While the economic recession in 2008 was found not to be a force majeure event,[5] government orders to shut down non-essential businesses in favor of social distancing due to the COVID-19 pandemic may constitute force majeure.
As is so often the case in the law, the answer will depend on the language in your contract. If your contract does not have a force majeure clause, you have not bargained for its protection, and the argument will be much harder to make. If you do have the language in your contract, a judge will have to determine whether this event fits the parameters you bargained for and wrote in your contract. Nevada courts have held that when a party makes a contract and reduces it to writing, he must abide by its terms as plainly stated therein.[6] If the clause is clear and unambiguous, the court must construe it from the language therein.[7]
Please contact one of our attorneys to review your contract if it contains a force majeure clause. You may be excused from performance.
[1] https://www.merriam-webster.com/dictionary/force%20majeure, accessed March 19, 2020.
[2] https://www.lexology.com/library/detail.aspx?g=e44183ab-74cf-4f2d-906a-7d7850427953, accessed March 19, 2020.
[3] One World Trade Ctr., LLC v. Cantor Fitzgerald Sec., 789 N.Y.S.2d 652, 655 (N.Y. Sup. Ct. 2004).
[4] https://www.venable.com/insights/publications/2011/02/understanding-force-majeure-clauses, accessed March 19, 2020.
[5] See Elavon, Inc. v. Wachovia Bank, Nat’l Ass’n, 841 F. Supp. 2d 1298 (N.D. Ga. 2011).
[6] See Chiquita Mining Co. V. Fairbanks, Morse & Co., 60 Nev. 142, 104 P.2d 191 (1940); Ellison v. California State Auto Ass’n, 106 Nev. 601, 797 P.2d 975 (1990).
[7] Southern Trust Mortg. Co. v. K&B Door Co., Inc., 104 Nev. 564, 763 P.2d 353 (1988).
