This clause designates cyber attacks as qualifying force majeure events that excuse a party from performing their contractual obligations in real estate transactions. A force majeure clause typically relieves a party from liability when unforeseen circumstances beyond their control prevent performance. By explicitly including cyber attacks, this clause recognizes that digital disruptions—such as ransomware, data breaches, or system failures affecting property records, transaction processing, or communications—may prevent timely completion of real estate deals. This is particularly relevant in modern real estate where digital systems manage title transfers, escrow accounts, and closing documentation. The clause essentially says: if a cyber attack makes it impossible to perform, neither party can sue the other for breach, provided the affected party took reasonable precautions and notified the other party promptly.
However, the enforceability and scope of this clause depends heavily on its specific language. Courts may question whether a cyber attack was truly "unforeseeable" or whether the affected party failed to maintain adequate cybersecurity. Real estate transactions involve sensitive financial and personal data, so parties need clarity on what constitutes a qualifying attack, what notice requirements apply, and whether the excused party must still attempt alternative performance methods.
If you're drafting or reviewing this clause in a real estate contract, insist on specific definitions: what types of cyber events qualify (e.g., attacks on your systems only, or third-party service providers too?), what security standards you must maintain to invoke the clause, and what notice and mitigation steps are required. Include a time limit for the force majeure excuse (e.g., 30 days) after which performance becomes mandatory again, and clarify whether the excused party must use alternative methods (manual processing, paper records) to complete the transaction. Consider whether cyber insurance requirements should be a condition of relying on this clause.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause designates cyber attacks as qualifying force majeure events that excuse a party from performing their contractual obligations in real estate transactions. A force majeure clause typically relieves a party from liability when unforeseen circumstances beyond their control prevent performance.
Why should I care about this clause?
By explicitly including cyber attacks, this clause recognizes that digital disruptions—such as ransomware, data breaches, or system failures affecting property records, transaction processing, or communications—may prevent timely completion of real estate deals. This is particularly relevant in modern real estate where digital systems manage title transfers, escrow accounts, and closing documentation.
What are my options?
The clause essentially says: if a cyber attack makes it impossible to perform, neither party can sue the other for breach, provided the affected party took reasonable precautions and notified the other party promptly. However, the enforceability and scope of this clause depends heavily on its specific language.
How does this affect small businesses?
Courts may question whether a cyber attack was truly "unforeseeable" or whether the affected party failed to maintain adequate cybersecurity. Real estate transactions involve sensitive financial and personal data, so parties need clarity on what constitutes a qualifying attack, what notice requirements apply, and whether the excused party must still attempt alternative performance methods.