Standard Clause Pack
This document provides a suite of force majeure clauses and related provisions for use in commercial supply agreements, trade facilitation agreements, distribution agreements, advisory agreements, and other cross-border commercial contracts. Select the variant or combination appropriate to the nature of the transaction and the jurisdictions involved. Usage notes are provided at the end.
VARIANT 1 — COMPREHENSIVE FORCE MAJEURE CLAUSE
(Recommended for supply agreements and long-term commercial contracts)
1.1 Definition of Force Majeure Event
For the purposes of this Agreement, a "Force Majeure Event" means any event or circumstance beyond the reasonable control of the affected Party that prevents or delays that Party from performing any of its obligations under this Agreement, including but not limited to:
Acts of God, including earthquake, flood, hurricane, typhoon, volcanic eruption, lightning, or other natural disaster;
War (whether declared or undeclared), armed conflict, invasion, terrorist attack, civil war, insurrection, or riot;
Acts of government or governmental authority, including expropriation, nationalisation, embargo, trade restriction, export or import prohibition, sanctions, or change in applicable law that makes performance illegal or impossible;
Pandemic, epidemic, or public health emergency declared by a competent national or international authority (including the World Health Organization), or government-mandated lockdown, quarantine, or movement restriction arising therefrom;
Industrial action, strike, or lockout that is industry-wide or affecting a critical sector relevant to the affected Party's performance, and which is not caused by that Party's own actions;
Failure of critical infrastructure, including power grid failure, telecommunications failure, or disruption to transport networks, where such failure is not caused by the affected Party;
Severe and prolonged disruption to the supply of raw materials or components caused by any of the above events, where the affected Party has taken reasonable steps to mitigate such disruption.
A Force Majeure Event does not include: (a) economic downturn or adverse market conditions; (b) fluctuation in commodity prices or exchange rates; (c) failure to secure financing; (d) an event that was foreseeable at the time of execution of this Agreement and for which the affected Party failed to take precautions; or (e) any event caused by the negligence or wilful misconduct of the affected Party.
1.2 Effect of Force Majeure Event
If a Party (the "Affected Party") is prevented from or delayed in performing any obligation under this Agreement by a Force Majeure Event, the Affected Party shall not be in breach of this Agreement or liable to the other Party (the "Non-Affected Party") for any such failure or delay, provided that the Affected Party:
Notifies the Non-Affected Party in writing as soon as practicable after the onset of the Force Majeure Event, and in any event within _____ business days, specifying: (a) the nature of the Force Majeure Event; (b) the obligations affected; (c) the expected duration of the Force Majeure Event; and (d) the steps being taken to mitigate its impact;
Uses all reasonable endeavours to overcome, mitigate, or work around the Force Majeure Event and to resume performance of the affected obligations as soon as reasonably practicable;
Provides regular updates to the Non-Affected Party (not less than every _____ days) on the status of the Force Majeure Event and the expected timeline for resumption of performance;
Does not use the Force Majeure Event as an excuse to delay performance of obligations that are not affected by the Force Majeure Event.
1.3 Mitigation Obligation
The Affected Party shall take all commercially reasonable steps to mitigate the impact of the Force Majeure Event on its performance obligations, including sourcing alternative suppliers, engaging alternative logistics providers, or taking any other commercially practicable step available in the circumstances. The Non-Affected Party shall cooperate with the Affected Party in identifying mitigation measures.
1.4 Duration and Termination Right
If the Force Majeure Event continues for a period exceeding _____ consecutive days, either Party may terminate the affected Purchase Order(s), contract, or this Agreement (as applicable) by giving _____ days' written notice to the other Party. In such case:
Neither Party shall have any liability to the other for the termination, save that the Affected Party shall remain liable for any amounts already due and payable before the Force Majeure Event commenced;
The Parties shall negotiate in good faith regarding the reallocation of any costs, prepayments, or commitments made prior to the Force Majeure Event;
Where goods are in transit at the time of termination, the Parties shall agree the disposition of such goods and allocation of any associated costs.
1.5 No Price Adjustment
Unless otherwise agreed in writing, a Force Majeure Event does not entitle either Party to an adjustment of the Contract Price or to suspend payment obligations for goods or services already delivered or performed prior to the Force Majeure Event.
VARIANT 2 — SHORT-FORM FORCE MAJEURE CLAUSE
(Suitable for commission letters, simple supply arrangements, and short-term agreements)
Neither Party shall be liable to the other for any failure or delay in performing its obligations under this Agreement to the extent that such failure or delay is caused by circumstances beyond its reasonable control, including acts of God, war, terrorism, government action, pandemic, industrial dispute, or disruption to transport or infrastructure (a "Force Majeure Event"). The affected Party shall notify the other Party in writing within _____ business days of the onset of the Force Majeure Event and shall use all reasonable endeavours to resume performance as soon as practicable. If the Force Majeure Event continues for more than _____ consecutive days, either Party may terminate this Agreement by giving _____ days' written notice, without liability to the other save for obligations already accrued.
VARIANT 3 — FORCE MAJEURE WITH HARDSHIP PROVISION
(For long-term contracts where prolonged disruption may require renegotiation rather than termination)
3.1 Force Majeure. [Insert Variant 1 above, clauses 1.1 to 1.5.]
3.2 Hardship. If a Force Majeure Event or any other change in circumstances beyond the reasonable control of a Party makes continued performance of this Agreement fundamentally more onerous — but not impossible — for that Party (a "Hardship Event"), the Parties shall, upon written request from the affected Party, enter into good-faith renegotiation of the affected terms of this Agreement within _____ days of such request. The purpose of renegotiation shall be to restore an equitable balance between the Parties' respective obligations. If the Parties fail to reach agreement on revised terms within _____ days of commencing renegotiation, either Party may refer the matter to dispute resolution in accordance with the governing law and dispute resolution clause of this Agreement.
3.3 Continued Performance. During the notice and renegotiation period referred to in clause 3.2, the affected Party shall continue to perform its obligations under this Agreement to the fullest extent possible, and the Hardship Event shall not entitle the affected Party to suspend performance.
VARIANT 4 — INDIA-SPECIFIC CONSIDERATIONS
(Additional provisions relevant to Indian exporters and India-EU transactions)
4.1 DGFT Force Majeure Certificate. Where the Affected Party is an Indian exporter and is required to demonstrate a Force Majeure Event to the Directorate General of Foreign Trade (DGFT) or to any Indian regulatory authority, the Non-Affected Party shall cooperate in providing such documentary evidence as may reasonably be required, including written confirmation of the disruption experienced by the Affected Party.
4.2 Port Congestion and Logistics. Congestion at Indian ports (including JNPT, Mundra, Chennai, and Kolkata) or disruption to inland logistics networks within India shall constitute a Force Majeure Event for the purposes of delivery obligations only, provided that: (a) the congestion or disruption is industry-wide and not confined to the Affected Party's specific consignment; (b) the Affected Party provides documentary evidence from the port authority or logistics provider; and (c) the Affected Party took all commercially reasonable steps to arrange alternative routing.
4.3 Government Export Restriction. Any restriction, ban, or quota on the export of the relevant goods imposed by the Government of India after the date of this Agreement (including under the Foreign Trade (Development and Regulation) Act 1992) shall constitute a Force Majeure Event. The Affected Party shall promptly notify the Non-Affected Party and shall cooperate in seeking any available exemption or licence.
VARIANT 5 — PANDEMIC AND BIOSECURITY SPECIFIC CLAUSE
(For contracts in pharmaceutical, food, and healthcare sectors)
A pandemic, epidemic, or public health emergency declared by the World Health Organization or any competent national authority, and any associated government-mandated restriction, lockdown, quarantine, or travel ban, shall constitute a Force Majeure Event for the purposes of this Agreement. Where a pandemic or biosecurity event causes: (a) closure of the Affected Party's production facility by order of a competent authority; (b) a mandatory quarantine of the Affected Party's workforce of _____ per cent or more; or (c) denial of access to a critical port or logistics hub for a period exceeding _____ days, the Affected Party's performance obligations shall be suspended for the duration of such closure, quarantine, or denial of access, subject to the notice and mitigation obligations in [Variant 1, clause 1.2]. The Parties shall review the position every _____ days and shall cooperate to develop contingency supply arrangements.
USAGE NOTES
Variant 1 is recommended for: supply agreements; distribution agreements; annual supply frameworks; and any contract where delivery timelines are material commercial terms.
Variant 2 is recommended for: commission letters; advisory retainer agreements; and short-form or interim contracts.
Variant 3 is recommended for: multi-year contracts; contracts with fixed pricing over extended periods; and contracts involving significant capital investment by either party.
Variant 4 supplements Variant 1 for all India-export transactions. It should be inserted as additional clauses after Variant 1.5.
Variant 5 supplements Variant 1 for pharmaceutical, food, and healthcare sector contracts. It replaces the pandemic bullet in the Variant 1 definition list.
Governing law note: Force majeure doctrines vary significantly across jurisdictions. Under English law, force majeure is entirely a creature of contract; under Indian law, Section 56 of the Indian Contract Act 1872 may apply to frustration of contract in addition to any contractual force majeure clause. Legal advice should be sought on the interaction between the contractual clause and applicable mandatory law.
Doc 26 — Force Majeure Clause Standard Pack — Neutral Template