When COVID-19 began its swift spread in the winter of 2019 and on a more global scale in the early spring of 2020, it did not take long for the term "force majeure" to dominate discussions, especially within the hospitality industry. Who could have predicted its extensive global economic impact? Think about the massive shutdowns, closures, and the global halt of tourism—if those in the hospitality industry were not familiar with the term "force majeure" prior to the COVID-19 pandemic, they certainly were after.
What is Force Majeure?
The term "Force Majeure" means superior or greater force. It is a concept typically captured in contracts to address unforeseeable circumstances out of the contracting parties’
control that materially impacts a party’s ability to fulfill its obligations under the contract. Many may have also heard this referred to as an "act of God." Force majeure is reserved for circumstances so unusual, unforeseeable, extraordinary, unavoidable, or unpreventable, the occurrence of which ought to excuse the contracting party’s failure to fulfill or delay its performance of its contractual obligations. Some circumstances commonly classified as force majeure events are wars, strikes, major natural disasters such as earthquakes, and terrorist acts.
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