Force Majeure in Tumultuous Times: Impracticability as the New Impossibility

Abstract

Force majeure clauses excuse a party from performance if some unforeseen event beyond its control prevents performance of its contractual obligations. Although the prior standard of “impossibility” to invoke force majeure has effectively been replaced by “impracticability,” arbitration tribunals rarely enforce force majeure clauses unless the specific impediment is defined in the clause. As a result, the standard of “impracticability” is not as easy to prove as it might appear to be. Foreseeability, failure to explore alternate performance, and lack of timely notice are common reasons that force majeure defenses fail. Due to tribunals’ typically narrow and restricted application of force majeure clauses, they should be detailed, comprehensive, and focus on the particular circumstances of the transaction at issue.