Riots and looting – does force majeure apply?
Force majeure is a clause in a contract that frees parties from their obligations in the event of unforeseeable circumstances
Contracts are quite specific as to what would qualify as force majeure
Force majeure is a clause in a contract that frees both parties from liability when an extraordinary event beyond the control of the parties prevents one or both from fulfilling their obligations under the contract.
Businesses that suffered losses in the recent unrest may be able to invoke force majeure clauses, thereby releasing them from their contracts.
Force majeure usually comes into play after natural disasters but can also cover public violence and riots.
If there is no force majeure clause, an affected business may invoke the concept of “supervening impossibility” if the event is reasonably unforeseeable and unavoidable.
Does force majeure apply to the recent riots and looting in parts of Gauteng and KZN?
The Money Show’s Bruce Whitfield interviewed Michael Straeuli, Partner at Webber Wentzel (scroll up to listen).
It used to be called ‘An Act of God’… Contracts are quite specific as to what would qualify…Michael Straeuli, Partner - Webber Wentzel
This article first appeared on CapeTalk : Riots and looting – does force majeure apply?
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