Force Majeure

Force majeure is a contractual provision that suspends or excuses a party's performance obligations when an exceptional event or circumstance beyond that party's reasonable control makes performance impossible, illegal, or radically different from what was contracted, typically entitling the affected party to an extension of time but not automatically to additional payment.

What is Force Majeure?

Under FIDIC Sub-Clause 19 (1999 forms) and Clause 18 (2017 forms), an event qualifies as force majeure if it is beyond the affected party's control, could not reasonably have been provided against before the contract was entered into, could not reasonably have been avoided or overcome, and is not substantially attributable to the other party. FIDIC lists specific "exceptional events" including natural catastrophes, war, rebellion, epidemics (added prominently after COVID-19 experience), ionising radiation, and certain strikes. General market conditions, price escalation, and supply shortages in ordinary commercial circumstances do not qualify.

The party affected must give notice as soon as practicable after becoming aware of the force majeure event, specifying the event and the obligations likely to be impaired. The consequence is normally an extension of time and, for certain listed events (principally those resulting from the acts of the employer's country's authorities or the presence of the employer's forces), compensation for additional cost. Force majeure is distinct from an entitlement to a variation-order: the contractor does not carry out different scope, it is excused from meeting the programme in the affected period. If the event is prolonged, the contract may be terminated under specific force majeure termination provisions, triggering a defined payment to the contractor for work done and costs incurred.

Why Force Majeure matters for bidders

Force majeure clauses are not a catch-all excuse for performance difficulty. Courts and arbitral tribunals read them narrowly, and the notice obligations are strict: a claim not notified promptly is frequently time-barred. When a project is affected by an event that might qualify, give written notice immediately and keep detailed records of the impact on programme and cost. Do not assume that because an event is dramatic it meets the contractual test, as many supply chain disruptions and price escalations have been held not to qualify. Also note that force majeure usually suspends the obligation to perform and the obligation to pay liquidated-damages, but does not automatically release the contractor from the underlying contractual obligations once the event passes.

FAQ

Does force majeure entitle a contractor to additional payment?

Not automatically. A time extension is the standard remedy. Additional cost is only compensable for certain force majeure events specified in the contract, typically those caused by the employer's country's authorities or armed conflict.

How quickly must force majeure be notified?

FIDIC requires notice "as soon as practicable" after the affected party became aware of the event, and in any case within the notice period prescribed for claims. Late notification can extinguish the entitlement.

Can a force majeure event lead to contract termination?

Yes. If the force majeure event prevents performance for a prolonged period, typically 84 consecutive days or 140 days in total under FIDIC 1999, either party may terminate the contract with payment to the contractor for completed work and costs reasonably incurred.