This clause gives the party affected by force majeure extra time to complete their obligations without being in breach of contract. For instance, if a shipping company's port is closed for two weeks due to a hurricane, this clause might extend their delivery deadline by two weeks automatically. The clause protects the performing party from penalties while events beyond their control prevent performance. However, it can leave the other party waiting indefinitely, which is why the period should always have a defined limit.
Always insist on a specific time limit—never accept "reasonable time" or "as long as needed." Propose language like "extended by a period equal to the force majeure delay, up to a maximum of 90 days." Also add a clause allowing you to terminate if performance is delayed beyond that limit, so you're not locked into waiting forever. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause gives the party affected by force majeure extra time to complete their obligations without being in breach of contract.
Why should I care about this clause?
For instance, if a shipping company's port is closed for two weeks due to a hurricane, this clause might extend their delivery deadline by two weeks automatically.
What are my options?
The clause protects the performing party from penalties while events beyond their control prevent performance.
How does this affect small businesses?
However, it can leave the other party waiting indefinitely, which is why the period should always have a defined limit.