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Force majeure adviser beta

A tool to help you assess if you (or the other side) can avoid performing the contract due to COVID-19 disruption.

Step 1: Use the slider to select if you are a supplier or customer

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You are a supplier and cannot perform the contract due to COVID-19

You are a supplier and your customer says it cannot meet its commitments

You are a customer and your supplier says it cannot meet its commitments

You are a customer and cannot meet your commitments due to COVID-19

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Step 2: Use the slider to select the nearest description of your contract

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Step 3: Read the guidance. May the force be with you!

👉 Get legal advice if you're not sure. Read

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Overall: Without a contract, or no force majeure clause, your situation will depend on local law.

Overall: Your contract is going to be the biggest deciding factor. The lack of a reference to pandemics or similar events is not fatal - what matters is how broad the clause is and what specific events it lists or excludes.

Overall: If your force majeure clause is clearly broad enough or specifically covers the disruption you are facing, it's a great starting point. But it may still have other strings attached.

Overall: You've got a force majeure clause that seems to cover your situation, and no obvious caveats. Great! But make sure you check what the consequences of relying on a force majeure event are - and if it's not clear, take the cautious approach.

Overall: You've got a force majeure clause that covers your situation, with no obvious caveats that apply to you. And the contract gives you some clear direction as to your rights. It sounds like you're in a good place.

Overall: Without a contract, it's going to be hard for your customer to rely on force majeure, unless the event is directly making it impossible for it to comply with the contract.

Overall: Your contract is going to be the deciding factor. The lack of a reference to pandemics or similar events is not the most important thing - what matters is how broad the clause is and what specific events it lists or excludes.

Overall: If the force majeure clause is broad and your customer is finding it impossible to perform, or the clause specifically covers the disruption your customer is facing, then it may have a case. But there may be other conditions which may help you to push back.

Overall: So there's a force majeure clause that seems to cover your customer's situation, and no obvious caveats. You may need to accept that it can't perform. But it's not the end of the story.

Overall: There is a force majeure clause that covers your customer's situation, with no obvious caveats. And the contract gives clear direction as to what happens next. It's likely that the customer has the right not to perform the contract (or at least the relevant parts of it).

Overall: Without a contract, or no force majeure clause, the situation will be uncertain and will depend on local law.

Overall: If the force majeure clause is broad and your supplier is finding it impossible to perform, or the clause specifically includes the kind of disruption your supplier is facing, then the supplier may have a lawful excuse for not performing.

Overall: So there's a force majeure clause that seems to cover your supplier's situation, and no obvious caveats. You may need to accept that it can't perform. But it's not the end of the story.

Overall: There is a force majeure clause that covers your supplier's situation, with no obvious caveats. It's likely that the supplier has the right to delay or not to perform the contract (or at least parts of it) especially if the contract sets it out clearly.

Overall: Without a contract or a clear contractual get-out clause, it's going to be hard for you to rely on force majeure or similar legal concepts.

Overall: If the force majeure clause is broad and you find it impossible to perform your part of the contract, or the clause specifically covers the disruption you are facing, then you may have a case.

Overall: So there's a force majeure clause that seems to cover your situation, and no obvious caveats. You're nearly home and dry, but it's not the end of the story just yet.

Overall: There is a force majeure clause that covers your situation, with no obvious caveats. It's likely that you have the right not to perform the contract (or at least the relevant parts of it), and it's even better if the contract gives clear direction as to what happens next.

In practice...

Since there will always be factual and legal uncertainties, it's a good idea to talk to your customer first, without delay, before taking any unilateral action or issuing formal notices, especially If you are not getting legal advice.

Unless you are confident of your legal rights, try talk to your customer first, before taking any action or issuing a formal notice.

These sorts of conditions are the stuff of litigators' dreams. You don't want to go there. The best policy is to get talking with your customer. That should not stop you from issuing a notice that you are impacted by force majeure (to reserve your rights and to follow any notice requirements in the contract). But if you're wrong, you might find yourself on the back foot with a claim for breach of contract from your customer. So unless you're sure, talk first before taking any definitive steps or issuing any formal notices that you intend not to comply with the contract.

Discuss with your customer what you can and can't deliver. You may be able to agree an interim arrangement, for example for partial delivery and modified payment terms. See our COVID19 tool, which will help you to frame up such a conversation. There may be other parts of the contract that could help you such as price adjustment mechanisms or simply the right to terminate without cause.

Don't be too cocky. The best policy is to get talking with your customer. This is a tricky space, so if you act beyond your rights you might find yourself on the back foot with a claim for breach of contract from your customer. That should not stop you from issuing a notice that you are impacted by force majeure (to reserve your rights and to follow any notice requirements in the contract). But unless you're 100% sure about your legal rights, talk first before taking any drastic steps.

For commercial reasons you may want to hear your customer out. If the customer is not under any minimum commitment to you, it can simply stop or reduce orders or terminate for convenience. The customer may need to cut services and suppliers, so empathising and collaborating may be the price of not losing the account altogether.

You may want to hear your customer out. Especially if under the contract the customer can simply stop or reduce orders or terminate for convenience. The customer may need to cut services and suppliers, so empathising and collaborating may be the price of not losing the account altogether.

If you're less than sure about your legal rights, the best policy is to talk with your customer and find a win-win. Especially if the customer can simply stop or reduce orders or terminate for convenience. Empathising and collaborating may be the price of not losing the account altogether.

Talk to you customer and try to get clarity on each other's positions and what happens next. You may be able to agree an interim arrangement that is a win-win. See our COVID19 tool, which will help you to frame up such a conversation. You should still insist on your contractual rights for those parts that are not made impossible, and for payments where you have delivered value.

All is not lost. The best policy is to talk to your customer. Try to figure out what parts of the contract can still continue to be performed, and how that will work. This is a tricky space, and you should both know that if your customer acts too aggressively it could end up in breach of contract itself. You should still insist on your contractual rights for those parts that are not made impossible, and for payments where you have delivered value.

Since there will always be factual and legal uncertainties, it's a good idea to talk to your supplier. Especially if the supplier can refuse to accept orders or terminate for convenience. The supplier is likely to be experiencing significant commercial and financial strain - you may need to support your supplier to prevent it going out of business altogether. Commercially (and maybe legally) it's going to be difficult to insist on liquidated damages and penalties for late delivery - if the failures are being caused by COVID-19 disruption.

Since there will always be factual and legal uncertainties, it's a good idea to talk to your supplier. Especially if the supplier can refuse to accept orders or terminate for convenience.

If you're less than sure about your legal rights, the best policy is to talk with your supplier and find a win-win. Especially so if the supplier can simply refuse orders or terminate for convenience.

Talk to you supplier and try to get clarity on what happens next. The supplier is likely to be experiencing significant commercial and financial strain - you may be able to agree an interim arrangement that is a win-win and enables the supplier to continue doing business. Use our

COVID-19 Negotiator

⁠

tool to help you frame up such a conversation.

Talk to your supplier - try to figure out if and how parts of the contract can still continue to be performed. You should still insist on your contractual rights for those parts of the contract that are not made impossible. Demand a (pro rata) refund for any payments you have made for which you have not received value. Usually either side will have the right to terminate the contract without liability once the force majeure event continues for a given period of time (usually 30-60 days of continuing disruption, but could be shorter). Diarise your termination rights, so you can exit the contract when you need to, or use that as leverage.

Since there will always be factual and legal uncertainties, it's a good idea to talk to your counterparty before taking any unilateral action or issuing formal notices, especially If you are not getting legal advice. Your supplier may be prepared to cooperate to help you out (by reducing supplies, allowing more time to pay, accommodating delays, or even reducing prices) especially if it knows that you need to make cuts or consolidate suppliers. Collaborating with you may be the price of not losing the account altogether.

Unless you are confident of your legal rights, talk to your customer first, before taking any action or issuing a formal notice.

These sorts of conditions is the stuff of litigators' dreams. The best policy is to get talking with your customer. That should not stop you from issuing a notice (to reserve your rights and to follow any notice requirements in the contract). But if you're wrong, you might find yourself on the back foot with a claim for breach of contract from your customer. So unless you're sure about your rights, talk first before taking any significant unilateral steps (especially holding back payments).

Talk to you supplier to try to get clarity on each other's positions and what happens next. Your supplier may be prepared to cooperate to help you out (by reducing supplies, allowing more time to pay, accommodating delays, or even reducing prices) especially if it knows that you need to make cuts or consolidate suppliers. Collaborating with you may be the price of not losing the account altogether.

Don't be too cocky. This is a tricky space, so If you're acting beyond your rights you might find yourself on the back foot with a claim for breach of contract from your supplier.

Don't forget to...

Document the factors that are causing you disruption, such as order cancellations and non-delivery by our own suppliers. Also document your own efforts (and costs) to resolve the situation.

Give notice to the customer and provide information to back it up - your contract may have specific requirements for that. It needs to be done promptly. Document the factors that are causing you disruption, such as order cancellations and non-delivery by our own suppliers. Also document your own efforts (and costs) to resolve the situation.

Serve timely notices of the disruption you are facing (but see the above guidance). Document the factors that are causing you disruption, such as non-delivery by your own suppliers. Also document your own efforts (and costs) to resolve the situation.

Document the factors that are causing you disruption, such as order cancellations and non-delivery by our own suppliers. Also document your own efforts (and costs) to resolve the situation.

Serve timely notices of the disruption you are facing (but see the above guidance). Document the factors that are causing you disruption, such as order cancellations and non-delivery by our own suppliers. Also document your own efforts (and costs) to resolve the situation.

Ask your customer for details of what is causing their problems. Document your own efforts (and costs) in helping your customer overcome the situation.

If your customer gives you notice of a force majeure event, respond promptly and reserve your legal rights (otherwise you might be treated as accepting without intending to). Ask your customer for details of what is causing their problems. Document your own efforts (and costs) in helping your customer overcome the situation, and use that as commercial leverage.

Respond without delay: reserve your rights and ask your supplier for details, including how they are mitigating the situation and when they expect to be able to resume normal delivery. Document your own efforts (and costs) in helping your customer overcome the situation, if you agree to do so. You must still pay your supplier for services, goods or other value received even if the contract will now be suspended or terminated.

If your supplier gives you notice of a force majeure event, respond without delay (otherwise you might be treated as accepting, without intending to). Reserve your rights and ask your supplier for details, including how it is mitigating the situation and when it expects to be able to resume normal delivery. Document your own efforts (and costs) in helping your supplier overcome the situation, if you agree to do so. You must still pay your supplier for services, goods or other value received even if the contract will now be suspended or terminated.

If your supplier gives you a formal notice, respond without delay (otherwise you might be treated as accepting without intending to). Reserve your rights and ask your supplier for details, including how it is mitigating the situation and when it expects to be able to resume normal delivery. As a general rule, you must still pay your supplier for services, goods or other value received even if the contract will now be suspended or terminated.

If your supplier gives you notice of a force majeure event, respond promptly and reserve your legal rights (otherwise you might be treated as accepting without intending to). Ask your supplier for details of what is causing its problems, what it is doing about it and when it expects to resume normal performance. You must still pay your supplier for services, goods or other value received even if the contract will now be suspended or terminated.

Document the factors that are causing you disruption, especially lock-down restrictions and supply chain impacts which are in turn the result of the crisis.

Document the factors that are causing you disruption, especially lock-down restrictions and supply chain impacts which are in turn the result of the crisis. Coordinate with finance, to avoid inadvertently paying future payments or instalments. Getting the money back after the event is going to be difficult.

Document the factors that are causing you disruption, especially lock-down restrictions and supply chain impacts which are in turn caused by the crisis and qualify as force majeure events. Coordinate with finance, to avoid inadvertently paying future payments or instalments. Getting the money back after the event is going to be difficult.

Watch out for...

Make sure your customer hasn't sneaked in its standard terms of business (attached or referenced in your customer's orders or were sent to you by email). They may apply even if you never signed them. If you have a contract, but you can't find a force majeure clause, check for anything else that deals with events outside of the parties' control. Look under Termination, or try searching for words like "frustration", "impossible", "control", "act of god", "unforeseen".

Excluded events. If any of the problems you are facing are in a list of exclusions in your force majeure clause, or you clause is narrowly written (e.g. includes only specific events which don't apply here) you can't rely on having a contractual excuse. Make sure there are no strings attached (like foreseeability) - see the next item on the slider.

Business continuity measure which must continue even in the event of force majeure.

Business continuity measures, or specific actions you need to take (for example using best endeavours to secure alternative source of supply) - you may be required to do this even if it's onerous.

Customer rights to suspend and terminate the contract once the force majeure event continues for a period of time. Usually it will be in the region of 30-90 days, but it could be shorter. Customer rights to go for alternative sources once you can't deliver. It may be difficult to get the business back once they do that.

Events which are expressly included or excluded. If any of the problems your customer is facing are specifically mentioned in a list of included or excluded events, that will count for a lot. So review your contract before giving any formal response to the customer. Your customer's difficulties do not automatically excuse you. Unless the contract says that your performance can also be suspended, you'll still be expected to continue with your obligations.

Attempts by unscrupulous customers to use the crisis to pressure you for price reductions or avoiding payments - get informed and insist on your rights. Your customer's difficulties (when genuine) do not automatically excuse you. Unless the contract says that you can also suspend performance, you'll still be expected to continue with your obligations unless you agree otherwise.

Make sure the supplier hasn't sneaked in its standard terms of business (attached or referenced in its offer or invoices or sent to you by email). They may apply even if you never signed them. If you have a contract, but you can't find a force majeure clause, check for anything else that deals with events outside of the parties' control. Look under Termination, or try searching for words like "frustration", "impossible", "control", "act of god", "unforeseen".

Events which are expressly included or excluded. If any of the problems your supplier is facing are specifically mentioned in a list of included or excluded events, that will count for a lot. So review your contract before giving any formal response to the supplier. Your supplier's difficulties do not automatically excuse you. Unless the contract allows you to suspend the contract in response, you'll still be expected to continue with your obligations.

Events which are expressly included or excluded. If any of the problems your supplier is facing are specifically mentioned in a list of included or excluded events, that will count for a lot. So review your contract before giving any formal response to the supplier. Your supplier's difficulties do not automatically excuse you. Unless the contract allows you to suspend your own performance in response, you'll still be expected to continue with your obligations.

Attempts by suppliers to use the crisis as an excuse to pressure you for price increases or better terms - get informed and insist on your rights. Many (but not all) suppliers are going to be experiencing disruption but that alone does not mean they can pass their risk on to their customers. Your supplier's difficulties (when genuine) do not automatically excuse you. Unless the contract says that you can also suspend performance, you'll still be expected to continue with your obligations.

Events which are expressly included or excluded. If any of the problems you are facing are specifically mentioned in a list of included or excluded events in your force majeure clause, that will count for a lot. Your own difficulties do not automatically excuse your supplier. Unless the contract allows the supplier to suspend performance in response to your force majeure notice, you should still expect continued performance for those parts of the contract you can still proceed with.

Supplier's rights to suspend and terminate the contract if the force majeure event continues for a period of time. Usually it will be in the region of 30-90 days, but it could be shorter. Your own difficulties do not automatically excuse your supplier. Unless the contract allows the supplier to suspend performance in response to your force majeure notice, you should still expect continued performance for those parts of the contract you can still proceed with.

Supplier's rights to suspend and terminate the contract once the force majeure event continues for a period of time. Usually it will be in the region of 30-90 days, but it could be shorter. Your own difficulties do not automatically excuse your supplier. Unless the contract allows the supplier to suspend performance in response to your force majeure notice, you should still expect continued performance for those parts of the contract you can still proceed with.

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Force majeure adviser beta

Step 1: Use the slider to select if you are a supplier or customer

01⁠

Step 2: Use the slider to select the nearest description of your contract

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Step 3: Read the guidance. May the force be with you!

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