Editor’s Note: The reach of the common law umbrella is vast and transcends our current emphasis on regulatory proceedings.
For common law jurisdictions, there is no single definition of force majeure. The application of the doctrine is decided on a case-by-case basis.
When the contract is governed by a common law system, the courts will generally start from the presumption that parties are free to agree on all matters, which includes the freedom to agree to widen or narrow relief in force majeure situations. Generally, force majeure provisions are interpreted by focusing on the actual language used, with the result that each case rests on its own contractual language and set of facts.
Understanding the contractual wording in common law jurisdictions becomes critical for organizations trying to understand their risk exposure, mitigating factors and potential remedies. If the contract states that a force majeure event must “prevent” performance, and the matter reaches the court, the affected party must generally demonstrate evidence that its performance has become legally or physically impossible, not merely more difficult or more expensive. It’s also useful to remember that the legal position in each country may differ should the matter go before the courts.
