What Happens When You Claim Force Majeure?
What happens after claiming force majeure really depends on the contract. There are different ways how it could end up for you.
- Suspension – This is the most common consequence of claiming force majeure event for either or both parties. In practice, this grants the affected party an extension of time for performance until the event impacting its ability to do so ceases.
- Termination – Depending on the contract, termination can either arise as an automatic consequence of claiming force majeure or it may give the parties discretion to terminate, normally after a specified period of time.
- Compensation – In rarer cases, the contract will allow the affected party to claim financial compensation from the non-affected party for costs associated with the force majeure event. In those circumstances, carefully check the costs that the affected party is entitled to, how these should be calculated and what (if any) mitigation obligations apply.