This protects you if a government embargo or trade ban prevents you from performing—for example, if the US government bans trade with a certain country and you were supposed to export goods there. Embargoes are sudden, official restrictions on trade, and they're genuinely outside a company's control. This clause matters because embargoes can destroy a contract's entire purpose overnight, and it would be unfair to punish a party for obeying the law. However, you should check whether the clause covers all embargoes or only those announced after the contract was signed—an embargo that existed when you agreed shouldn't excuse performance.
Specify that the embargo must have been announced after the contract date, or you're excusing performance for something you already knew about. Ask what happens to money already paid—does the other party keep it, or do you get a refund? Consider whether the clause should survive if the embargo is lifted within a certain time period (say, 90 days). ---
Frequently Asked Questions
What does this clause mean in simple terms?
This protects you if a government embargo or trade ban prevents you from performing—for example, if the US government bans trade with a certain country and you were supposed to export goods there.
Why should I care about this clause?
Embargoes are sudden, official restrictions on trade, and they're genuinely outside a company's control.
What are my options?
This clause matters because embargoes can destroy a contract's entire purpose overnight, and it would be unfair to punish a party for obeying the law.
How does this affect small businesses?
However, you should check whether the clause covers all embargoes or only those announced after the contract was signed—an embargo that existed when you agreed shouldn't excuse performance.