Fri. Sep 24th, 2021

City gas distribution

Transporting future fuel

#60 Force Majeure in Gas Contract

2 min read

In general, a force majeure clause specifies unforeseen and uncontrollable events that would make it impossible for a party to meet its contractual obligations. If a covered event occurs, the force majeure clause may excuse a party from performing under the contract.

Force majeure clauses commonly include specific examples of covered events, such as natural disasters, weather-related events, terrorist attacks, or acts of war. These clauses can be drafted broadly or narrowly depending on the intent of the parties to the contract. They can specifically enumerate covered events, or alternatively, they can speak in more general terms about the types of events that would be covered.

Courts will generally look at the following factors to determine whether performance may be excused pursuant to a force majeure triggering event: 1) whether the language of the force majeure clause covers the triggering event; 2) whether the party seeking to be excused from having to perform can demonstrate that the triggering event materially inhibited its ability to perform under the contract; and 3) whether the triggering event is beyond the parties’ control.

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