In an Era of Extreme Disruptions, Here’s When and How to Invoke Force Majeure

In navigating COVID-19-related disruptions, suppliers should carefully assess any force majeure clauses in their customer contracts. Force majeure provisions may limit suppliers’ liability if they cannot meet supply commitments due to events relating to the COVID-19 outbreak and bolster their bargaining position in client negotiations.

Suppliers need to understand the contractual grounds for invoking force majeure, the requirements for providing notice of a force majeure event and the parties’ obligations following an effective force majeure declaration.