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. Can you ask your landlord to remove a waiver of subrogation clause from your lease?

    Learn how to remove a waiver of subrogation clause from a lease. Find out also why you might not want to strike this clause ... Read Answer >>
  2. Can you sue an insurance company for not paying a claim over a waiver of subrogation ...

    Learn more about insurance and why waivers of subrogation are common with property insurance. Find out about liability risk ... Read Answer >>
  3. Are waivers of subrogation clauses ever ineffective in preventing a third-party lawsuit?

    Learn why a waiver of subrogation clause in your lease or construction contract is no solid guarantee that you won't end ... Read Answer >>
  4. Do contractors require subrogation clauses for their contract workers?

    Discover if general contractors require subrogation clauses when hiring contract workers and what form documents are most ... Read Answer >>
  5. How do I use The Force Index for creating a forex trading strategy?

    Learn how forex traders can create a trading strategy when using the force index, a technical oscillator that shows trend ... Read Answer >>
  6. How can a futures trader exit a position prior to expiration?

    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in ... Read Answer >>
Related Articles
  1. Markets

    Corporate Bonds and the Importance of Covenants

    Any type of investor, private or institutional, should be acquainted with the significance of covenants in corporate bond agreements.
  2. Managing Wealth

    Estate Planning: Other Types Of Wills

    by Cathy Pareto, CFP®, AIF® (Contact Author | Biography) In addition to the traditional types of wills discussed in Part 2, there are other types of wills, which include the following: ...
  3. Personal Finance

    Contingency Clauses In Home Purchases Contracts

    Real estate contracts often contain contingency clauses, which are conditions or actions that must be met for a contract to be binding.
  4. Personal Finance

    Life Insurance Clauses Determine Your Coverage

    Understanding these key parts of your policy will help you to ensure that your family will be covered.
  5. Trading

    Is The Santa Claus Rally For Real?

    Will Santa Claus bring the gift that investors are looking for this year? What are the chances of a Santa Claus rally?
  6. Trading

    Discovering The Force Index

    Learn how to measure the power of bulls behind rallies and bears behind declines.
  7. Personal Finance

    Soon, You Can Sue Your Bank Again

    Americans are going to regain the right to sue a bank or credit card company – but not in all cases. We explain what changes and what doesn't.
  8. Markets

    Market Economy

    In a market economy, economic decisions and prices are determined by market forces rather than by central planning.
  9. Entrepreneurship & Small Business

    Master The Art Of Negotiation

    Learn the strategies that will help you to come out on top in any negotiation.
  10. Retirement

    Buyout Offer? 12 Ways to Tell If It’s Good

    When you are presented with a package, take a close look at these elements – and be sure to negotiate, if possible.
RELATED TERMS
  1. Contingency Clause

    A contract provision that requires a specific event or action ...
  2. Honorable Undertaking

    A reinsurance treaty clause indicating that the agreement should ...
  3. Abandonment Option

    A clause granting parties the option of withdrawing from the ...
  4. After-Acquired Clause

    A provision included in legal contracts ensuring that subsequent ...
  5. Alienation Clause

    A clause in a mortgage contract that requires full payment of ...
  6. Exculpatory Clause

    A contract provision that relieves one party of liability if ...
Trading Center