Force Majeure Clauses in US Contract Law: Enforceability, Drafting, and Practical Guidance for Businesses

What Is Force Majeure and Why It Matters

Force majeure refers to a contractual provision that frees a party from its obligations when extraordinary, unforeseeable events prevent performance. The term comes from French law and means "superior force." In practice, a force majeure clause addresses what happens when a party cannot perform due to circumstances beyond its reasonable control: natural disasters, war, government action, pandemics, or other unforeseeable events.

For US businesses, force majeure clauses have become increasingly important. Recent global disruptions including the COVID-19 pandemic, supply chain breakdowns, tariff uncertainties, and extreme weather events have generated thousands of disputes over whether parties can invoke these clauses. The question is no longer theoretical. Businesses now routinely encounter situations where they cannot deliver goods, complete services, or perform as promised due to circumstances that seem entirely outside their control.

The stakes are high. A successful force majeure defense can free a party from millions in liability. A failed invocation can expose the defending party to breach of contract damages, specific performance orders, or loss of business relationships. Getting these clauses right at the drafting stage can prevent years of litigation.

Force Majeure Is Not a Default Rule in US Law

This point cannot be overstated: there is no general, common-law force majeure doctrine in the United States. Unlike many civil law jurisdictions and some international legal frameworks that recognize an implied duty to excuse performance when unforeseeable, impossible events occur, US courts will not imply such an excuse into a contract simply because performance became difficult or impossible.

The principle is straightforward. A party agrees to do something. If circumstances change, the party is still bound by its word unless the contract explicitly provides otherwise. Courts treat force majeure as a negotiated exception to the general rule of contractual liability, not as an automatic safety valve.

This means businesses that fail to include a force majeure clause must rely on narrower common-law doctrines like impossibility, impracticability, or frustration of purpose, which are much harder to establish. Every contract carries risk. Explicit drafting of force majeure language is the way to manage that risk.

Elements of an Enforceable Force Majeure Clause

Not all force majeure clauses are created equal. Courts interpret these clauses narrowly, and the burden of proof rests on the party invoking the clause. Several elements must be present for a clause to work when you need it most.

First, the triggering event must actually occur. The clause must be clear about what events qualify. A vague reference to "unforeseen circumstances" is weaker than a detailed enumeration of specific events.

Second, the event must have been unforeseeable at the time the parties signed the contract. If the parties knew or should have known that a particular risk existed, they cannot later claim force majeure. This is the foreseeability test. Courts examine the state of knowledge at contract formation, not at the time of performance failure.

Third, the event must render performance impossible, not merely expensive or difficult. This is the impossibility standard. Courts distinguish between true impossibility and mere hardship. A substantial increase in costs, even doubling or tripling, typically does not satisfy the impossibility requirement. The party invoking force majeure must show that performance became truly impossible, not just unprofitable.

Fourth, specificity matters greatly. A clause that explicitly mentions the type of event that occurred is far more likely to be enforced than a clause with only catch-all language. Courts construe force majeure clauses strictly and against the drafter. This means they interpret ambiguities in favor of the non-breaching party.

Jurisdictional Differences: New York versus California

The enforceability of force majeure clauses varies significantly by jurisdiction. Two states that host major commercial centers illustrate the range of interpretation.

New York courts take a narrow, strict view of force majeure. The clause must explicitly reference the type of event that occurred. Vague language does not suffice. A clause that lists "acts of God" but fails to expressly mention, say, government sanctions or tariffs, will not excuse performance even if tariffs actually caused the nonperformance. New York judges read these clauses literally and will not expand them beyond their express terms.

California courts, by contrast, are somewhat more flexible. They will uphold a force majeure defense even without a direct textual reference to the specific event if the event was genuinely unforeseeable and rendered performance impossible. California courts focus more on the actual nature of the occurrence and less on whether the exact words appeared in the clause.

These differences matter for contract drafting. A clause that works well in California might fail in New York. Businesses operating across multiple states should include detailed, enumerated language to ensure consistency and enforcement.

Key Case Law and What the Courts Have Decided

Court decisions illustrate both successful and failed force majeure defenses. These cases reveal how judges actually apply the doctrine in practice.

In a Ninth Circuit case from 1983, an aluminum corporation invoked force majeure when its supplier failed to deliver as promised. The court found that the force majeure clause was sufficiently broad to cover supplier failure and that the interruption was indeed unforeseeable and beyond the company's control. The clause was enforced, and the buyer could not recover damages. This case teaches that well-drafted catch-all language combined with enumerated categories can provide real protection.

A Michigan Court of Appeals decision from 2015 had a different outcome. A solar panel manufacturer signed a contract to deliver panels at a fixed price. When the cost of raw materials spiked, the manufacturer tried to invoke force majeure. The court rejected the defense. The court found that cost increases, even substantial ones, do not constitute impossibility. A bad bargain is not force majeure. The manufacturer remained liable for breach. This case emphasizes that economic hardship alone will not excuse performance.

An Oregon District Court decision from 2020 involved tariffs on building materials. The contractor argued that newly imposed import tariffs made performance economically impracticable. The court rejected this argument. The clause did not explicitly mention tariffs or government trade actions. Even though the tariffs were not anticipated at contract formation, the court refused to expand the clause beyond its specific terms to include government trade actions. The contractor remained liable.

Finally, a Second Circuit case from 1993 addressed force majeure in the context of an export ban. A company contracted to supply radio equipment but could not deliver because the US government imposed an embargo on Iran. The court found that the force majeure clause was broad enough to cover government action and that the embargo was unforeseeable. The clause was enforced. This case demonstrates that explicit references to government action in a force majeure clause can succeed even when courts are otherwise skeptical.

Related Doctrines: Impossibility, Impracticability, and Frustration of Purpose

Parties without a force majeure clause can sometimes rely on common-law doctrines that excuse performance, though these are narrower and harder to establish.

Impossibility is the broadest of these doctrines. When performance becomes literally impossible after contract formation through no fault of the breaching party, the duty to perform is excused. However, "impossible" means genuinely impossible, not difficult or expensive. Courts require that the specific subject matter of the contract be destroyed, that a specific person be unavailable when their identity was central to the contract, or that a specific condition necessary to performance be eliminated.

Impracticability is a broader doctrine. Under the Restatement (Second) of Contracts and UCC Section 2-615, performance is excused when its cost has become so prohibitive as to be beyond the contemplation of the parties. However, this doctrine applies only when performance is not impossible but is impracticable due to an extreme, unforeseen occurrence. The party must show that the event was not foreseeable at formation and that the party did not assume the risk.

UCC Section 2-615 specifically addresses the sale of goods. It excuses performance when circumstances have made the goods' performance impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made. This is narrower than a contractual force majeure clause but broader than common-law impossibility.

Frustration of purpose is the narrowest doctrine. It applies when an unforeseen event destroys the purpose for which the contract was made, even though performance remains technically possible. Courts are very reluctant to apply this doctrine and require that the frustration be substantial and that the party not have assumed the risk.

Tariffs and Government Action as Force Majeure Events

Current trade uncertainties have brought force majeure and government action into sharp focus for many businesses. Tariffs, sanctions, and trade restrictions are now real business concerns.

A force majeure clause that explicitly mentions tariffs, import duties, trade restrictions, or government acts directly addresses this uncertainty. General language about government action or "acts beyond a party's control" is weaker. Courts have rejected force majeure defenses for tariff-related performance failures when the clause did not expressly reference government trade actions.

The question becomes: are tariffs foreseeable? In today's environment, trade policy shifts are not entirely unexpected. However, the specific imposition of tariffs on particular goods at particular rates on a particular date may well be unforeseeable. A well-drafted clause should acknowledge this distinction by including specific language about trade barriers, government policy changes, and regulatory action without requiring the party to have anticipated the exact nature of the restriction.

Importantly, a tariff increase that makes performance more expensive but does not render it impossible will typically not satisfy the impossibility standard. A 50 percent increase in material costs due to tariffs may be severe, but courts have often rejected force majeure claims based on cost alone. The drafter should consider whether cost thresholds, such as a 200 percent increase in material costs within a certain period, should trigger force majeure rights. Explicit thresholds are easier to administer than open-ended standards.

Drafting a Force Majeure Clause: Practical Recommendations

How should a business draft its force majeure language to maximize enforceability? Several best practices emerge from reported cases and commercial practice.

First, enumerate specific events. The clause should explicitly list natural disasters, war, government action, pandemics, labor strikes, terrorism, and any other events that are particularly relevant to the business relationship. For supply contracts, include supplier failure. For international contracts, include war and government sanctions. Specificity signals to courts that the parties thoughtfully considered the risks.

Second, include catch-all language following the enumeration. After listing specific events, add language such as "or any other cause beyond the reasonable control of the performing party and which could not have been prevented by the exercise of reasonable care." This combination of specific enumeration plus a catch-all clause provides both clarity and flexibility.

Third, establish notice procedures. Require the claiming party to provide prompt written notice of the force majeure event, including details about the nature of the event, its expected duration, and its impact on performance. Notice requirements create accountability and give the non-breaching party time to mitigate or explore alternatives.

Fourth, include mitigation obligations. The clause should require the claiming party to take all reasonable steps to resume performance as soon as the impediment ends. This prevents parties from using force majeure as an excuse for prolonged inaction.

Fifth, consider establishing triggering thresholds. For events involving cost increases, specify that force majeure applies only when costs increase by more than a stated percentage, such as 150 percent or 200 percent. This prevents a party from invoking the clause for every cost increase while still protecting against truly catastrophic price movements.

Sixth, clarify the remedy. Specify whether the claiming party is excused from performance entirely, is entitled to extend the performance deadline, or must allocate available supplies or production capacity among customers. Different contracts may call for different remedies. Clarity prevents disputes over what the clause actually means.

What to Do When a Force Majeure Event Occurs

Even with a well-drafted clause, the way a party handles a force majeure event matters. Execution is important.

Provide notice immediately. Do not wait to see if you can find a workaround. Delayed notice can waive the right to invoke force majeure and damages the party's credibility with the counterparty. Write a formal notice that identifies the event, explains its impact on performance, and describes the steps being taken to resume performance.

Document everything. Keep records of the triggering event, its impact on the business, the efforts taken to mitigate, communications with the other party, and any costs incurred. This documentation will be critical if the dispute ends up in court.

Take reasonable steps to mitigate. Courts and counterparties will scrutinize whether the claiming party did everything reasonable to minimize the impact. If alternative suppliers or performance methods exist, use them. If partial performance is possible, offer it.

Communicate openly with the counterparty. Do not take a purely adversarial stance. Explain the situation, work together to find solutions, and keep the other party informed of progress toward resumed performance. Maintaining the relationship improves the likelihood that the other party will be flexible.

Resume performance promptly when the event ends. Do not continue claiming force majeure relief after the impediment has passed. Courts and counterparties will view such behavior as bad faith, and it undermines the party's legal position.

Conclusion

Force majeure is not an automatic escape hatch from contractual obligations in US law. It is a negotiated exception that must be expressly included in the contract and then strictly interpreted and narrowly construed. The party invoking the clause carries the burden of proof.

Drafting matters greatly. Specific enumeration of events, catch-all language, notice procedures, mitigation obligations, and triggering thresholds all increase the likelihood that the clause will be enforced when needed. Jurisdictional differences in interpretation mean that national contracts should include detailed language to work across multiple state courts.

For businesses operating in a world of tariffs, sanctions, supply chain disruptions, and unpredictable government action, a well-drafted force majeure clause is essential risk management. Without it, the business relies on narrower common-law doctrines that courts are reluctant to apply. With it, properly drafted and carefully invoked, the clause can provide meaningful protection when extraordinary events prevent performance.

The cost of including detailed force majeure language at the contract formation stage is minimal. The cost of litigating whether a vague clause applies when a major event strikes can be substantial. Every commercial contract should address the question of what happens when extraordinary events make performance impossible.