Force majeure literally means “superior force”, and a force majeure clause is a provision in a contract that releases a party from obligation when a fortuitous event occurs preventing performance of the contract. A non-performing party may invoke a force majeure clause when the reason for non-performance is circumstances beyond the party's control and not any fault or negligence by the non-performing party. However, courts have ruled that mere impracticality or unanticipated difficulty is not enough to excuse performance. For example, courts generally do not recognize economic downturn as a force majeure event. Rather, force majeure events are usually defined as "Acts of God" and also include both natural and man-made events like fires, floods, storms, earthquakes, war, labor disputes and acts of terrorism.
Louisiana law does provide for some force majeure protection. Codified in Louisiana Civil Code Art. 1876, the base legal protection provides that when the entire performance owed by a party to a contract has become impossible because of a fortuitous event, the contract is dissolved. Louisiana Civil Code Art. 1877, in turn, provides that when a party’s performance of its contractual obligations has been rendered impossible in part by a fortuitous event, the court may reduce the other party's obligations proportionally, or, according to the circumstances, may declare the contract dissolved. However, courts have ruled that the protections of Civil Code Arts. 1876 and 1877 apply only in situations where performance has been rendered truly impossible; therefore, in order to cover lesser events, it is important to include a detailed force majeure clause in contracts prior to execution. The attorneys at The Kyle Law Firm have years of experience in drafting effective contracts, give us a call at: 225-293-8400.
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