Acts of God/Force Majeure

“Things have changed…circumstances, Jerry, beyond the … acts of God… force majeure…”

— Carl Showalter (Steve Buscemi) to Jerry Lundegaard (William H. Macy) in Fargo (1996)

It’s an ironic line, of course, because while circumstances had definitely changed – “Blood has been shed, Jerry…” – they were not caused by events outside the control of the people involved, but were, instead, authored by them, the exact opposite of an….

Act of God

An Act of God means

“[a]ny accident due to natural causes directly and exclusively without human intervention, such as could not have been prevented by any amount of foresight and pains, and care reasonably to have been expected.” City of Portsmouth v. Culpepper, 64 S.E.2d 799,801 (1951).

It has long been recognized that such “accidents of major force…” i.e. force majeure, “… or fortuitous events, or the acts of God…” may excuse a party’s failure to perform under a contract.  See, e.g., Reed v. United States, 78 U.S. 591, 606 (1870).

Force Majeure Clause

The purpose of a “force majeure” clause in a contract is, therefore, to define the types of events which the parties agree constitute excusable acts of God.

A typical force majeure clause may list such events as:

“… acts of God; unusually severe weather conditions; strikes or other labor difficulties; war; riots; requirements, actions or failures to act on the part of governmental authorities preventing performance; inability despite due diligence to obtain, maintain or renew required licenses; accident; fire…”  Gordonsville Energy v. Va. Elec. & Power, 512 S.E.2d 811, 813 (1999).

A court will examine whether a party’s excuse for failing to perform its contract qualifies as an Act of God under the circumstances of a particular case.

For example, failing to pay a subcontractor is probably not excusable as an Act of God because such an event is not “outside the control of either party.”  Middle E. Broad. Networks, Inc. v. Mbi Global, LLC, Case No.: 1:14-cv-01207-GBL-IDD (E.D. Va. Jul. 28, 2015).

A war, such as the war against ISIS, may qualify as an excusable Act of God, unless the parties specifically agree in their contract that performance “would not be waived or excused for any reason whatsoever.”  Id.