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Super short (plain language for simple low-risk contracts)
Super short (plain language for simple low-risk contracts)
Short form (for simple contracts) 2
Heading
Clause
Key variables
Deep dive
Criticality
Supplier biased
Two-way with bias to supplier
Two-way with bias to customer
Customer biased
Playbook 4
Playbook 2
Playbook 3
Playbook 1
Heading
Clause
Key variables
Deep dive
Criticality
Supplier biased
Two-way with bias to supplier
Two-way with bias to customer
Customer biased
Playbook 4
Playbook 2
Playbook 3
Playbook 1
1
Force majeure events
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A force majeure event is a valid excuse for delaying or not performing this agreemnet.
A party will not be in breach of this agreement or liable for any delay or failure to perform any obligation under this agreement to the extent that it results from circumstances beyond the reasonable control of that party, including natural disaster, adverse weather conditions, armed conflict, civil unrest, terrorism, fire or explosion, inevitable accident, sanctions or government restrictions, environmental contamination, epidemic or pandemic and associated supply chain disruption and shortages, new laws or governmental orders that could not have been reasonably anticipated, and labour disputes ("Force Majeure Event").
A party will not be in breach of this agreement or liable for any delay or failure to perform any obligation under this agreement to the extent that it results from circumstances beyond the reasonable control of that party, including natural disaster, adverse weather conditions, armed conflict, civil unrest, terrorism, fire or explosion, inevitable accident, sanctions or government restrictions, environmental contamination, epidemic or pandemic and resulting supply chain disruption and shortages, and labour disputes ("Force Majeure Event").
A party will not be in breach of this agreement or liable for any delay or failure to perform any obligation under this agreement to the extent that it results from circumstances beyond the reasonable control of that party and could not have been reasonably anticipated or avoided, including natural disaster, armed conflict, civil unrest, terrorism, fire or explosion, inevitable accident, sanctions or government restrictions, environmental contamination, unavailability of production, materials, facilities, transportation or labour caused by epidemic or pandemic, and strikes or similar industrial action ("Force Majeure Event").
A party will not be in breach of this agreement or liable for any delay or failure to perform any obligation under this agreement to the extent that it results from circumstances beyond the reasonable control of that party and could not have been reasonably anticipated or avoided, including natural disaster, armed conflict, civil unrest, terrorism, fire or explosion, inevitable accident, sanctions or government restrictions, environmental contamination, unavailability of production, materials, facilities, transportation or labour caused by epidemic or pandemic, and strikes or similar industrial action ("Force Majeure Event").
The definition is narrow, favouring customers. Avoid overly broad definitions. Pay attention to pandemics (pandemics generally or only specific consequences?), and labour disputes ("strikes" is narrower than "labour disputes"). Events which are already under way like COVID-19 may not be treated as unforeseeable so might not be force majeure. If COVID-19 prevents you from buying and receiving services as the customer e.g. due to the closure of your facilities - see the Long Form clause.
The definition is broad, favouring suppliers. You don't need an exhaustive list, but it should be reviewed carefully to include things that might be otherwise unclear. Pay attention to pandemics (pandemics generally or only specific consequences?), and labour disputes ("strikes" is narrower than "labour disputes"). Events which are already under way like COVID-19 may not be treated as unforeseeable so not force majeure - you may need separate clauses dealing with specific consequences of COVID-19.
The definition is narrow, favouring customers. Avoid overly broad definitions. Pay attention to pandemics (pandemics generally or only specific consequences?), and labour disputes ("strikes" is narrower than "labour disputes"). Events which are already under way like COVID-19 may not be treated as unforeseeable so might not be force majeure. If COVID-19 prevents you from buying and receiving services as the customer e.g. due to the closure of your facilities - see the Long Form clause.
The definition is broad, favouring suppliers. You don't need an exhaustive list, but it should be reviewed carefully to include things that might be otherwise unclear. Pay attention to pandemics (you want it as broad as possible), and labour disputes ("labour disputes" is broader than "strikes"). Events which are already under way like COVID-19 may not be treated as unforeseeable so not force majeure - you may need separate clauses dealing with specific consequences of COVID-19.
2
Excluded events
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The following will not be considered as a Force Majeure Event: (a) delay or failure by any subcontractors or suppliers unless it is in turn caused by a Force Majeure Event; or (b) any strike or similar industrial action by the workforce of the party relying on the Force Majeure event.
The following shall not be considered as a Force Majeure Event: (a) delay or failure by any subcontractors or suppliers unless it is in turn caused by a Force Majeure Event; or (b) any strike or similar industrial action by the workforce of the party relying on the Force Majeure event or of its affiliates.
The following shall not be considered as a Force Majeure Event: (a) delay or failure to by any subcontractors or suppliers; (b) any strike or similar industrial action by the workforce of the party relying on the Force Majeure event or of its affiliates; (c) shortages of or increases in the price of components or materials.
The following shall not be considered as a Force Majeure Event: (a) delay or failure by any subcontractors or suppliers of the party relying on the Force Majeure Event; or (b) any strike or similar industrial action by the workforce of the party relying on the Force Majeure event (or of its affiliates) which could not have been reasonably prevented; (c) shortages of or increases in the price of components, materials or services; (d) adverse market conditions; (e) any event caused by a negligent act or omission of, or breach of contract, by the party relying on the Force Majeure Event.
Excluded events are defined broadly. You may want to include in this list events which trigger business continuity obligations and therefore should not be treated as a force majeure event at all. If the breadth of the exclusions is objected to, compromises can be made on the red items.
Excluded events should be defined narrowly, but not too narrowly as you may want to rely on those exclusions yourself if the other side claims a force majeure event.
Excluded events should be defined appropriately - not too broadly as you may want to rely on those exclusions yourself if the other side claims a force majeure event.
Excluded events should be defined as narrowly as possible. You could try removing labour disputes.
3
Obligations of the party relying on a force majeure event
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The party delaying or failing to perform due to a Force Majeure Event shall: (a) promptly notify and keep informed the other party; and (b) take reasonable steps to mitigate the effect of the Force Majeure Event.
The party delaying or failing to perform due to a Force Majeure Event shall: (a) promptly notify and keep informed the other party; and (b) take reasonable steps to mitigate the effect of the Force Majeure Event.
The party delaying or failing to perform due to a Force Majeure Event, or expecting such a delay or failure, shall: (a) promptly notify and keep informed the other party; and (b) use its best efforts to mitigate the effect of the Force Majeure Event.
The party delaying or failing to perform due to a Force Majeure Event, or expecting such a delay or failure, shall: (a) promptly notify and keep informed the other party; and (b) use its best efforts to mitigate the effect of the Force Majeure Event.
"Best efforts" can be reduced to "reasonable efforts" or similar. If there are any particular measures that are critical, you can list them as expressly included or excluded in "best efforts" or "reasonable efforts".
"Reasonable steps" can be changed to "commercially reasonable efforts" or similar. These distinctions don't have clear legal meanings, so if there are any particular measures that are critical, you can list them as expressly included or excluded.
"Best efforts" can be reduced to "reasonable efforts" or similar. If there are any particular measures that are critical, you can list them as expressly included or excluded in "best efforts" or "reasonable efforts".
"Reasonable steps" can be changed to "commercially reasonable efforts" or similar. These distinctions don't have clear legal meanings, so if there are any particular measures that are critical, you can list them as expressly included or excluded.
4
Right to terminate
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If a party's performance continues to be materially impacted by a Force Majeure Event for a period of more than [sixty (60) days], the other Party may (at its option) terminate this agreement immediately upon written notice.
If a party's performance continues to be impacted by a Force Majeure Event for a period of more than [sixty (60) days], the other Party may (at its option) terminate this agreement immediately upon written notice.
If a party's performance continues to be impacted by a Force Majeure Event for a period of more than [thirty (30) days], or is likely to be impacted for such period, the other Party may (at its option) terminate this agreement immediately upon written notice.
If a party's performance continues to be impacted by a Force Majeure Event for a period of more than [thirty (30) days], or is likely to be impacted for such period, the other Party may (at its option) terminate this agreement immediately upon written notice.
The period can be adjusted depending on the severity of the consequences of a force majeure event.
The period can be adjusted depending on the severity of the consequences of a force majeure event.
The period can be adjusted depending on the severity of the consequences of a force majeure event.
The period can be adjusted depending on the severity of the consequences of a force majeure event.
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