What do 'force majeure clauses' address in contracts?

Force majeure clauses in contracts are designed to address situations where a party is unable to perform its contractual obligations due to unforeseen circumstances that are beyond their control. These events can include natural disasters, wars, strikes, or other emergencies that prevent the fulfillment of contract terms.

By including a force majeure clause, parties can outline what constitutes a force majeure event and the procedures that will be followed if such an event occurs. This protects the parties from liability for non-performance when such extraordinary events disrupt their ability to execute the contract. Therefore, the focus of these clauses is specifically on non-performance caused by events that were not anticipated and which could not have been avoided through reasonable measures.

Other options, while relevant to contract management and risk mitigation, do not encapsulate the primary function of force majeure clauses. They deal with different aspects of contract administration, such as payment adjustments, amendments, or dispute resolution processes, but none directly address the aspect of unforeseen circumstances affecting performance.