Vis Major

DEFINITION of 'Vis Major'

A Latin term meaning "act of God", or an occurrence that is neither caused by nor preventable by humans. In commercial contracts, vis major can also apply to actions undertaken by third parties that neither party to the contract can control, such as failure by a supplier or subcontractor to perform. The terms "vis major", "act of God" and "force majeure" are commonly used in contracts to exclude one or both parties from liability and/or obligation when events beyond their control occur.

BREAKING DOWN 'Vis Major'

Insurance contracts often exclude coverage for damage caused by vis major, such as tornadoes, hurricanes, earthquakes and floods. Sometimes these events can be insured against with a rider or separate, specialized policy. Also, a finding that an adverse event was caused by vis major can exempt a defendant in a lawsuit from liability.

RELATED TERMS
  1. Event-Linked Bond

    A type of bond whose interest and principal payments are determined ...
  2. Rider

    A provision of an insurance policy that is purchased separately ...
  3. Force Majeure

    A French term literally translated as "greater force", this clause ...
  4. Hazard Insurance

    Insurance that protects a property owner against damage caused ...
  5. Act Of God Bond

    A bond issued by an insurance company, linking principal and ...
  6. Reinsurance

    The practice of insurers transferring portions of risk portfolios ...
Related Articles
  1. Home & Auto

    The Beginner's Guide To Homeowners' Insurance

    Discover everything new homeowners need to know before they sign on the dotted line.
  2. Economics

    The Delicate Dance of Inflation and GDP

    Investors must understand inflation and gross domestic product, or GDP, well enough to make decisions without becoming buried in data.
  3. Economics

    Industries That Thrive On Recession

    Recessions are not equally hard on everyone. In fact, there are some industries that even flourish amid the adversity.
  4. Stock Analysis

    6 Risks International Stocks Face in 2016

    Learn about risk factors that can influence your investment in foreign stocks and funds, and what regions are more at-risk than others.
  5. Investing News

    Tufts Economists: TPP Will Reduce U.S. GDP

    According to economists at Tufts University, the TPP agreement will destroy half a million jobs in the U.S. by 2025.
  6. Forex

    The Consumer Price Index

    Find out how this economic measure can help you make key financial decisions.
  7. Economics

    Understanding the History of Money

    Money has been a part of human history for at least 3,000 years, evolving from bartering to banknotes.
  8. Economics

    How Interest Rates Affect The U.S. Markets

    When indicators rise more than 3% a year, the Fed raises the federal funds rate to keep inflation under control.
  9. Investing News

    Global Headwinds Hit the 6 Biggest Economies

    As of Friday, initial estimates for fourth-quarter and full-year 2015 growth in gross domestic product (GDP) are available for five of the world's six largest national economies, and for the ...
  10. Economics

    Three Reasons 2016 Could Be A Better Year for the Global Economy

    The diminishing commodities market and China's slowing growth hurt a lot of companies and economies worldwide. However, there is a chance that much of the shaking out has already occurred.
RELATED FAQS
  1. What is a "force majeure"?

    A force majeure is derived from the French term meaning "greater force" and refers to any natural and unavoidable catastrophe. ... Read Full Answer >>
  2. What is comparative advantage?

    Comparative advantage is an economic law that demonstrates the ways in which protectionism (mercantilism, at the time it ... Read Full Answer >>
  3. How does the Wall Street Journal prime rate forecast work?

    The prime rate forecast is also known as the consensus prime rate, or the average prime rate defined by the Wall Street Journal ... Read Full Answer >>
  4. What's the difference between microeconomics and macroeconomics?

    Microeconomics is generally the study of individuals and business decisions, macroeconomics looks at higher up country and ... Read Full Answer >>
  5. How do you make working capital adjustments in transfer pricing?

    Transfer pricing refers to prices that a multinational company or group charges a second party operating in a different tax ... Read Full Answer >>
  6. Marginal propensity to Consume (MPC) Vs. Save (MPS)

    Historically, because people in the United States have shown a higher propensity to consume, this is likely the more important ... Read Full Answer >>
Hot Definitions
  1. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  2. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
  3. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  4. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  5. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
Trading Center