May the Force be with you

While sometimes found in a license agreement, force majeure language is usually only appropriate for the provision of services or maintenance, as a force majeure event is considered to be delay caused as a result of something outside the control of either party. This would not usually impact a license itself, as delay of use of the license cannot normally be the fault of the provider, except where there is a problem with delivery or installation services.

Force majeure events should be listed items that are also known as “Acts of God” but should not include delay as a result of preventable problems or events that have no true impact on the provision of the Services. For example, many force majeure clauses contain “earthquakes” (and now in 2007, “wars, riots and terrorism”) as listed events. This is only appropriate if the event is happening in the same geographic location as either the provider or the licensee and is where services are being performed or received. Otherwise, a war in a far-off country could be used to claim force majeure.

Some providers are also now attempting to list events that fall cleanly outside of the traditional view of force majeure. My favorite, perhaps, is “labor disputes and strikes.” Again, remember that force majeure is an event outside the control of the provider. While a provider doesn’t usually go on strike themselves, their ability to manage their workforce is within their control.

Additionally, the delay should only exist as long as the force majeure event predicating the delay. Some providers like to remain vague on when work will resume after a force majeure event. A general rule of thumb is that normal activity should resume when the event is over, as further delay will only be a detriment to the customer.

Lastly, some providers prefer to exclude customer’s payment obligations from receiving the benefit of force majure events. Customers should generally push back to keep the benefit of these events mutual, so long as the event is actually causing an impact upon both parties.

Are there items in a force majeure clause that strike you as interesting, funny or odd? Let us know in the comments!

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One thought on “May the Force be with you

  1. Anonymous

    1- the FM clause should always be clear that it’s events outside the control of the party seeking relief from performance, that the event itself is actually preventing/hindering performance (not just that one has occurred), that the excuse lasts only as long as the FM event, and that the excused party will use (whatever standard of) efforts to re-commence as promptly as possible.2- it doesn’t happen so much in software licenses, but if you lump enough services in there it could… I’ve seen some very pigheaded lawyers insist that the FM clause should apply to the business continuity/disaster recovery obligations. Try to understand the logic of that one… you’re paying them LOTS of additional money to be able to perform despite the occurrence of an event that would prevent any normal business from being able to perform, but they want the occurrence of that event to excuse them from performing the exact obligations you’re paying them to have in place so they aren’t affected… I’m talking to you, bank with the big red umbrella.

    Reply

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