What is a "force majeure"?

By Katie Adams AAA
A:

A force majeure is derived from the French term meaning "greater force" and refers to any natural and unavoidable catastrophe. A force majeure clause is included in contracts to remove liability when such events restrict participants from fulfilling their obligations. When negotiating these clauses, make sure that they apply equally and benefit all parties bound to the agreement. It may also be helpful to include some specific examples of acts that will be covered under the clause such as wars, natural disasters, and other major events that are clearly outside a party's control. Examples will help to clarify that the clause is not intended to apply to excuse failures to perform for reasons within the control of the parties.



(For more on this read, Preparing for Nature's Worst)



This question was answered by Katie Adams.



RELATED FAQS

  1. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ...
  2. How can I borrow money from my life insurance policy?

    Capitalize on the cash value of your whole life insurance policy and learn the details of how to borrow money from your life ...
  3. How does the grace period work on my Flexible Spending Account (FSA)?

    Learn how the grace period works on a flexible spending account so you can take full advantage of your annual pretax contributions.
  4. What are the tax implications of a life insurance policy loan?

    Learn the instances in which you are required to pay taxes on a life insurance policy loan, so you can avoid making a costly ...
RELATED TERMS
  1. Noncancellable Insurance Policy

    A life or disability insurance policy that an insurance company ...
  2. Member Month

    The number of individuals participating in an insurance plan ...
  3. Pre-Existing Condition Exclusion Period

    A health insurance benefit provision that places limits on benefits ...
  4. Policy Or Sales Illustration

    An educational tool that shows a prospective or new insurance ...
  5. Point-of-Service Plan (POS)

    A type of managed-care health insurance plan that provides different ...
  6. Paid-Up Additional Insurance

    Additional whole life insurance that a policyholder purchases ...
Related Articles
  1. With the second-largest economy in the world, China has significant (and growing) influence on the global economy. But how is that impact figured?
    Economics

    A Look At China's Growing Influence ...

  2. Here's how to incorporate life insurance into a plan to ensure that you and your family have the smoothest possible transition into retirement.
    Retirement

    The Smart Way To Use Life Insurance ...

  3. Tips and strategies for users to trade in different exchanges around the world.
    Economics

    Ever Wanted to Own International Stocks? ...

  4. Time to renew your health plan – or shop for a new one for 2015. Here's how to get the most from marketplace open enrollment for the Affordable Care Act.
    Insurance

    Health Open Enrollment: Read This Before ...

  5. Not sure how the Health Insurance Marketplace/Exchange works? Here are 5 ways to avoid frustration when enrolling through the federal or state exchanges.
    Insurance

    5 Ways To Ace 2015's Health Insurance ...

Trading Center