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. Act Of God

    An event that is outside of human control, and which is not directly ...
  2. Third Party Beneficiary

    A person who will benefit from a contract made between two other ...
  3. Anti-Indemnity Statute

    A law that defines how much risk one party can transfer to another ...
  4. Cross Liability Coverage

    An endorsement that provides coverage for insurance policies ...
  5. Force Majeure

    A French term literally translated as "greater force", this clause ...
  6. Continuous Contract

    A reinsurance contract that does not have a fixed contract end ...
Related Articles
  1. Personal Finance

    What is a Force Majeure?

    A force majeure clause frees both parties in a contract from fulfilling their obligations in the event of some catastrophic or unexpected occurrence.
  2. Trading

    The Difference Between Forwards and Futures

    Both forward and futures contracts allow investors to buy or sell an asset at a specific time and price.
  3. Financial Advisor

    How Do Futures Contracts Work?

    Futures contracts are one of the most important financial innovations in history, but they are often misunderstood. Find out this contract is used to transfer risk between different parties. ...
  4. Personal Finance

    Living And Death Benefit Riders: How Do They Work?

    Find out how these different riders work, and which type is right for you.
  5. Personal Finance

    Filling The Gaps In General Liability Insurance

    Standard liability coverage may not be enough. Special needs call for specialized policies.
  6. Personal Finance

    Understanding Insurance Claims

    An insurance claim is a formal request made to an insurance company that asks for a payment based on the terms of the policy.
  7. Financial Advisor

    Divorce and Annuities: What Clients Need to Know

    Divorce can be the most financially devastating event in a person’s life. Here’s what your clients need to know about handling annuities in a divorce case.
  8. Personal Finance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  9. Personal Finance

    Cover Your Company With Liability Insurance

    Every business is susceptible to legal action. Find out how to protect yours.
  10. Investing

    What is a Forward Contract?

    A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date.
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 Answer >>
  2. 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 >>
  3. What is the difference between forward and futures contracts?

    Fundamentally, forward and futures contracts have the same function: both types of contracts allow people to buy or sell ... Read Answer >>
  4. What is a tax-free 1035 Exchange?

  5. What is a forward contract against an export?

    Understand forward exchange contracts in exporting, and learn the purpose of using a forward contract and its advantages ... Read Answer >>
  6. How do the investment risks differ between options and futures?

    Learn what differences exist between futures and options contracts and how each can be used to hedge against investment risk ... Read Answer >>
Hot Definitions
  1. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  2. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  3. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  4. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  5. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  6. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
Trading Center