Remedies available to parties to a contract in the event of a force majeure

25th Apr 2020

In the case of a force majeure, including pandemics, parties to an agreement may not able to fulfil their contractual obligations. Nevertheless, that does not mean they are in breach of their obligations under the Contract or in breach of any Common Law principles. 

Force majeure, properly understood, is when parties to a Contract are unable to perform as a consequence of an intervening event outside of their control and that is unavoidable and not reasonably contemplated by the parties.

Two possible outcomes will prevail, depending on whether force majeure clauses have been included in the contract.

1. If the Contract Contains Force Majeure Clauses

The contract law of South Africa allows parties to agree freely on the conditions of the agreement, as long as they are not against the law. Parties are free to include, force majeure provisions in a Contract and if not included, the Common Law will apply and will be of automatic effect in any case.

In addition, parties may specify in detail which situations may trigger the force majeure provisions, any timeframes or penalties related to fulfilling the obligations, or other details. While drafting the contract, parties have to be aware that these clauses oblige them no matter how severe the impact of an event is, or the particular dynamics of a force majeure event.

Each party will be bound by the specific provisions of a force majeure clause as stipulated in a Contract.

2. When There Are No Force Majeure Clauses

If a contract does not contain force majeure clauses, parties to a contract can still add them. Upon mutual agreement, parties may sign an addendum to a contract at any time and determine their own specific measures to apply in the case of force majeure.

If there are no such clauses in an existing contract and both parties do not agree to adding them to their existing contract, then the South Africa Common Law Contractual provisions apply. According to the Common law, in the case of force majeure, both parties are excused from fulfilling the obligations, upon the happening, declaration and for the duration of a force majeure event. As soon as the force majeure ceases to exist, the parties are contractually bound to resume their respective performances under the particular contract.

The legal concept and implications of force-majeure-related consequences are complicated and require a deeper understanding of the technicalities of this legal concept. 

Contact us today so that we may seek to assist you to understand this concept and any impact force majeure provisions would have on your business and possibly on you personally.

We are here to navigate you through these tough times.