This clause excuses a party from delivering goods or services if their suppliers fail them due to unforeseeable events. For example, if a manufacturer can't get raw materials because a port closes unexpectedly, they might claim they're not in breach of contract. However, this only works if the contract specifically names supply chain problems as a force majeure event—many contracts don't. The legal principle is that you're only excused from performance if the contract says so; courts won't assume it. This matters because without clear language, you could be liable for damages even when the real problem was your supplier's failure, not yours.
Push back on this clause unless you have genuine, documented supply chain vulnerabilities. If you do include it, narrow it sharply: require the other party to prove they couldn't find alternative suppliers, and set a time limit (e.g., 30 days) before they can claim the excuse. Consider adding language that they must mitigate—meaning they must try to find workarounds rather than just giving up. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause excuses a party from delivering goods or services if their suppliers fail them due to unforeseeable events.
Why should I care about this clause?
For example, if a manufacturer can't get raw materials because a port closes unexpectedly, they might claim they're not in breach of contract.
What are my options?
However, this only works if the contract specifically names supply chain problems as a force majeure event—many contracts don't.
How does this affect small businesses?
The legal principle is that you're only excused from performance if the contract says so; courts won't assume it.