DETRIMENTAL NEGLECT OF FORCE MAJEURE IN COMMERCIAL CONTRACTS: FACTS, ISSUES AND A GLIMPSE AT COVID-19 EXAMPLE
Abstract
Man is a commercial being; he cannot do without exchanging what he has for
what he does not have. In doing this, he enters into contractual relationships.
However, he does not know what the future holds because he is not in control
of nature. Unforeseen events may occur to prevent his performance of
contractual obligations. In such situations, he has no choice but to seek refuge
in the concept of force majeure to mitigate the effects of contractual failures.
Force majeure, therefore, highlights the need to make provision for unforeseen
events in our business contracts. This is to enable the allocation of risks
whenever supervening events occur in a contractual relationship.
Unfortunately, as important as the concept is, it is often neglected and not
brought in the picture when contractual bargains are made and crystallized
into terms of a binding contract. Consequently, in times of war, pandemic, riot,
fire outbreak, flood, hurricane, earthquakes, strikes and those events beyond
the reasonable contemplation or control of the parties, it becomes problematic
to excuse contracting parties of their contractual obligation to each other. This
work looks into the facts, issues and roles of force majeure in commercial
contracts using the COVID-19 pandemic as an example. A doctrinal research
method was adopted in dealing with the topic. The article concluded that
though force majeure, as a concept, is mostly neglected, yet it is a necessary
weapon in the modern commercial world full of uncertainties. It was
recommended that contractual parties should always incorporate force
majeure in their contractual terms for ease of application.
what he does not have. In doing this, he enters into contractual relationships.
However, he does not know what the future holds because he is not in control
of nature. Unforeseen events may occur to prevent his performance of
contractual obligations. In such situations, he has no choice but to seek refuge
in the concept of force majeure to mitigate the effects of contractual failures.
Force majeure, therefore, highlights the need to make provision for unforeseen
events in our business contracts. This is to enable the allocation of risks
whenever supervening events occur in a contractual relationship.
Unfortunately, as important as the concept is, it is often neglected and not
brought in the picture when contractual bargains are made and crystallized
into terms of a binding contract. Consequently, in times of war, pandemic, riot,
fire outbreak, flood, hurricane, earthquakes, strikes and those events beyond
the reasonable contemplation or control of the parties, it becomes problematic
to excuse contracting parties of their contractual obligation to each other. This
work looks into the facts, issues and roles of force majeure in commercial
contracts using the COVID-19 pandemic as an example. A doctrinal research
method was adopted in dealing with the topic. The article concluded that
though force majeure, as a concept, is mostly neglected, yet it is a necessary
weapon in the modern commercial world full of uncertainties. It was
recommended that contractual parties should always incorporate force
majeure in their contractual terms for ease of application.
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