Force majeure clauses look like boilerplate until they're not. COVID-19 taught US courts that a pandemic might — or might not — be a force majeure event, and the drafting of the clause (not common law) usually decides. Before signing a US service agreement, look hard at what the force majeure clause covers, who bears the burden of mitigation, and whether performance is suspended or the contract can be terminated.
What is a Force Majeure?
A force majeure clause in a US service agreement allocates risk between parties when performance is prevented, hindered, or delayed by events beyond their reasonable control. Unlike civil-law systems, US common law generally does not recognize force majeure as an implied doctrine — parties get exactly what they draft. Related common-law doctrines include impossibility (Restatement (Second) of Contracts § 261), impracticability (UCC § 2-615 for goods), and frustration of purpose (§ 265). Post-COVID-19 case law (e.g. Gap Inc. v. Ponte Gadea, JN Contemporary Art LLC v. Phillips Auctioneers) has refined the specificity requirement for force majeure events.
Red flags to watch for
A list limited to 'fires, floods, earthquakes, war' without 'or other events beyond reasonable control' can exclude pandemics, supply-chain disruption, or cyber-attacks. Ejusdem generis limits unlisted events.
Since COVID-19, many vendor-favourable contracts now exclude pandemics from force majeure. This shifts all pandemic risk to the customer.
A force majeure claim should require prompt written notice (often 10 days) detailing the event, expected duration, and mitigation steps. Silence creates enforcement uncertainty.
The invoking party should have to use commercially reasonable efforts to avoid or mitigate the event's effects. Without it, you cannot enforce reasonable workarounds.
A clause allowing termination after 30 days of force majeure is customer-friendly; one requiring 180+ days locks you in even during extended disruptions.
Unless negotiated, payment often continues even when the vendor isn't performing. Consider pro-rata suspension of fees during the event.
Labour disputes, strikes, and lockouts are often the most likely force majeure events in practice. Vendors routinely exclude their own labour issues.
'Acts of God' is narrowly construed. Modern drafting uses 'Events Beyond Reasonable Control' with a comprehensive list including cyber-attack, terrorism, and government orders.
Your legal rights
US contracting parties are protected by: state common-law contract doctrines including impossibility (Restatement (Second) of Contracts § 261), impracticability, and frustration of purpose (§ 265); UCC § 2-615 for goods contracts (commercial impracticability); specific state statutory provisions; and the express terms of the force majeure clause (the primary source of rights in the US). Post-COVID-19 US case law includes Gap Inc. v. Ponte Gadea Delaware LLC (SDNY 2021), Backal Hospitality Group LLC v. 627 W. 42nd Retail LLC (NYSC 2020), and JN Contemporary Art LLC v. Phillips Auctioneers LLC (2d Cir. 2022). Enforcement is typically through contract litigation in state court, federal diversity court, or arbitration. Executive orders (federal, state, local) are often relied upon as qualifying events.
Questions to ask before you sign
- 1What specific events are listed as force majeure, and is there a catch-all?
- 2Are pandemics, epidemics, government orders, and cyber-attacks expressly included?
- 3What notice is required, and how soon after the event?
- 4Is mitigation obligated, and what efforts are required?
- 5Does the clause suspend, excuse, or allow termination?
- 6What is the termination threshold — 30, 60, 90, or 180 days?
- 7Do payment obligations continue, pause, or pro-rate during force majeure?
- 8How do common-law doctrines (impracticability, frustration) interact with the clause?
- 9Are labour disputes (including the invoking party's own) excluded?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.