Force Majeure - Beyond Boilerplate

Abstract

This article discusses a common feature in petroleum contracts, the force majeure clause. The force majeure clause is often overlooked by parties and lawyers alike as mere boilerplate; however, the clause has important implications when certain events preclude performance of an agreement. An explanation of what encompasses a triggering event with respect to a force majeure clause is followed by a discussion of the consequences when the clause is invoked in various contractual situations. The authors show how careful drafting of a force majeure clause can minimize the potential for dispute and litigation, with specific regard to the type of contract in which it is placed, the parties involved and the commercial context in which they parties are dealing. Finally, the article addresses how the courts in Alberta and elsewhere have judicially considered force majeure clauses and implications stemming from the cases.