Force Majeure

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What Is Force Majeure?

Force majeure is a clause mentioned in most contracts. It is a french word meaning ”greater force”. It defines certain acts or circumstances that are not in our control. For instance, disasters, outbreaks, or any other event which humans cannot control are mentioned in the clause, that no parties can be held accountable for. 

Significance of Force Majeure in E-commerce Logistics

A force majeure event clause is usually mentioned in supply contracts, financial agreements, real estate contracts, and many others along similar lines. If in case any of the uncertain events take place, the force majeure clause can shield your business and contracts. Some other importance of including this contract are:-

  • Long-term contracts can help you contract to get the reimbursement of the impacted period 
  • It saves heavy damage to your business
  • Force majeure law is most suitable for logistics or supply of goods
  • If you have taken an order from someone else with this law, you cannot be held accountable for any similar act. Therefore, the insurance company themselves have to deal with reimbursement. 

How Force Majeure Works 

Force majeure requires certain important information, such as–

  • the act must be unforeseeable, 
  • it should be impactful enough to render obligations from third parties, 
  • any natural disaster that happened at that place again, even after a long period, does not hold the insurance company accountable. 
  • The event must be external to both parties. 

Use Case With Force Majeure

Force majeure clauses can be found in many businesses, including– leases, supply contracts, service agreements, and merger and acquisition agreements. Including this clause in your business would help you with reimbursement and keep you out of legal trouble.   

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