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When may a construction contract include a force majeure clause?

On Behalf of | Jan 4, 2022 | Firm News

Whether your project stalls because of a natural disaster or supply shortages, the terms of an agreement may absolve you of liability. The American Bar Association notes that adding a force majeure clause could provide a defense against liability for construction delays and stoppages.

Force majeure clauses define particular events that may arise and make your work impossible to perform. If circumstances beyond your control prevent you from completing a project, you may refer to the force majeure clause to excuse your performance obligations.

Which events may a force majeure clause include?

A work agreement may outline specific events that allow you to submit a notice of an impossibility to perform. Force majeure clauses generally describe “Acts of God” such as hurricanes or tornados.

Based on your worksite’s location, you may wish to include natural disasters relating to local weather patterns. You could also include circumstances related to unexpected government restrictions. Embargoes or a forced shutdown of your construction site may prevent you from performing.

How may a contract prevent construction disputes?

As noted by The Daily Reporter, the leading cause of construction disputes in 2021 consisted of changes in work scope. Legal actions filed against owners, contractors and subcontractors alleged failures to understand the obligations outlined in an agreement.

Because of uncertainty involving suppliers, materials and labor, parties may need to modify a construction contract. If you could complete a project on time with some adjustments to the scope, you may discuss making changes to an agreement rather than claiming an impossibility to perform.

Contractual terms may address when parties could either exercise a force majeure clause or request an alteration to the construction plans. Meeting timelines and fulfilling the scope of work after a few adjustments may help prevent performance issues.