Overview

Often dismissed as boilerplate, force majeure is a clause commonly found in commercial agreements, which states that parties will not be liable for any delay in performance of obligations upon the occurrence of certain extraordinary events. This briefing outlines its effective use in contracts as well as some common pitfalls.

To illustrate the importance of this often over-looked clause, Shell Singapore recently declared force majeure on some of its customers after a fire affected a diesel fuel unit and forced Shell to shut down its refinery. If Shell had not included robust force majeure wording in its agreements with customers, then it could now be facing huge liabilities for breach of contract.

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