Force majeure

When force majeure has not been provided for in the contract (or the relevant event does not fall within the scope of the force majeure clause), and a supervening event prevents performance, it will be a breach of contract. The law of frustration will be the sole remaining course available to the party in default to end the contract. If the failure to perform the contract deprives the innocent party of substantially the whole benefit of the contract it will be a repudiatory breach, entitling the innocent party to terminate the contract and claim damages for that repudiatory breach.[8]

As interpreted by English courts, the phrase force majeure has a more extensive meaning than "act of God" or vis major. Judges have agreed that strikes and breakdowns of machinery, which though normally not included in vis major, are included in force majeure. (However, in the case of machinery breakdown, negligent lack of maintenance may negate claims of force majeure, as maintenance or its lack is within the owner's sphere of control.)

The term cannot, however, be extended to cover delays caused by bad weather, football matches, or a funeral: the English case of Matsoukis v. Priestman & Co (1915) held that "these are the usual incidents interrupting work, and the defendants, in making their contract, no doubt took them into account.... The words 'force majeure' are not words which we generally find in an English contract. They are taken from the Code Napoleon, and they were inserted by this Romanian gentleman or by his advisers, who were no doubt familiar with their use on the Continent." In Hackney Borough Council v. Dore (1922) it was held that "The expression means some physical or material restraint and does not include a reasonable fear or apprehension of such a restraint".

In re Dharnrajmal Gobindram v. Shamji Kalidas [All India Reporter 1961 Supreme Court (of India) 1285], it was held that "An analysis of ruling on the subject shows that reference to the expression is made where the intention is to save the defaulting party from the consequences of anything over which he had no control."

Even if a force majeure clause covers the relevant supervening event, the party unable to perform will not have the benefit of the clause where performance merely become (1) more difficult, (2) more expensive, and/or (3) less profitable.[9]

For example, parties in the United States have used the COVID-19 pandemic as a force majeure in an attempt to escape contractual liability by applying the elements of an (1) unforeseeable event, (2) outside of the parties’ control, that (3) renders performance impossible or impractical.[10] Though force majeure events are generally thought to include natural events like tornadoes and often unforeseeable man-made events like labor strikes, the 2021-2023 Inflation Surge is also impacting force majeure provisions in leasing and other real estate contracts to include delays or excuses from performing contractual obligations due to the increased costs from rising inflation and rising interest rates.[11]

For a defendant to invoke force majeure in French law, the event proposed as force majeure must pass three tests:

1. Externality

The defendant must have nothing to do with the event's happening.

2. Unpredictability

If the event could be foreseen, the defendant is obligated to have prepared for it.[12] Being unprepared for a foreseeable event leaves the defendant culpable. This standard is very strictly applied:

• CE 9 April 1962, "Chais d’Armagnac": The Council of State adjudged that, since a flood had occurred 69 years before the one that caused the damage at issue, the latter flood was predictable.
• Administrative Court of Grenoble, 19 June 1974, "Dame Bosvy": An avalanche was judged to be predictable since another had occurred around 50 years before.

3. Irresistibility

The consequences of the event must have been unpreventable.

Other events that are candidates for force majeure in French law are hurricanes and earthquakes. Force majeure is a defense against liability and is applicable throughout French law. Force majeure and cas fortuit are distinct notions in French law.

In Argentina, force majeure (fuerza mayor and caso fortuito) is defined by the Civil Code of Argentina in Article 512, and regulated in Article 513.[13] According to these articles, force majeure is defined by the following characteristics:[14]

• an event that could not have been foreseen or if it could, an event that could not be resisted. From these, it can be said that some acts of nature can be predicted, but if their consequences cannot be resisted it can be considered force majeure.
• externality: the victim was not related directly or indirectly to the causes of the event, e.g., if the act was a fire, or a strike
• unpredictability: the event must had been originated after the cause of the obligation.
• irresistibility: the victim cannot by any means overcome the effects.

In Argentina, Act of God can be used in Civil Responsibility regarding contractual or noncontractual obligations.

Lawyer Jose W. Diokno who argued for the standards of fortuitous events

As the oldest state with a size of over 300,000 sq km to integrate the two legal systems, the Philippines also has its own unique interpretation of force majeure events. Under the Civil Code in Article 1174,

"Except in cases specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which, could not be foreseen, or which, though foreseen were inevitable."[15]

Fortuitous events must not be caused by man but by nature. Therefore, economic crises are not considered as force majeure events that allows a debtor to be free of his obligation or debt. However such crises as an effect of wars such as WWII are considered as force majeure events as stated in Sagrada v. Nacoco (G.R. No. L-3756).[16] The landmark case on this article and event is the case of Nakpil & Sons v. CA (G.R. No. L-47851).[17] In this case, the Philippine Bar Association (PBA) building was the only building destroyed on Arzobispo St., Intramuros, Manila during an earthquake in 1968. The PBA, through the Jose W. Diokno Law Office, led by Sen. Diokno himself, sued Nakpil & Sons as well as the contractor of the building, United Construction Company, Inc., and won in the trial court.[18] The case was merely reiterated and affirmed by the Court of Appeals. Finally in 1986 the case was decided with finality by the Supreme Court. The Court mentioned the four requisites, by breaking down Article 1174. These are still the requisites used in Philippine courts today. These requisites are the ff:

• i) that the event was independent of the debtor's will;
• ii) that the event was unforeseeable or if foreseeable, it was inevitable;
• iii) that the fulfillment of the obligation becomes impossible to accomplish for the debtor; and
• iv) that the debtor had no participation in the non-performance of the obligation or the damage caused to the creditor;

In doing so, the Supreme Court ruled that there is no fortuitous event, after also observing certain problems in construction such as measurement deficiencies and poor foundations.[15]