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22 April 2015

Force majeure and Ebola - be specific

Force majeure, in general terms, is an event that is out of the control of contracting parties which releases the parties from their contractual obligations when the event occurs (or changes those obligations). 

As a civil law concept, force majeure is not a recognised concept under English law and therefore only a stated force majeure clause in a contract will be enforced by the English courts in accordance with the general principle that the courts will allow parties the freedom to contract with each other as they wish.

Interpretation therefore hinges on the specific wording and intentions of the parties at the time of contract.

Running alongside the devastating loss of life caused by the Ebola outbreak has been the impact on social infrastructure and businesses. This disruption to businesses brings the question: does Ebola translate into a force majeure event and remove or change any contractual obligations in place?

The answer is to be found in the detail of each case, for instance:

  • Is there a list of possible force majeure events within the clause? If yes, will it catch Ebola and the extent of the Ebola outbreak in that region (eg “epidemic”)? Is there a catch-all provision in the clause? Even if there is, bear in mind that such a provision is not fail-proof, particularly if there is nothing on the list that you can compare to an outbreak of disease.
  • What did the parties know at the time of contract? With frequent references to “unforeseeable events” in force majeure clauses, it will be important to consider whether there had there been any reports of instances of outbreak in the relevant surrounding areas. If the parties knew of Ebola and did not make express reference to it as a force majeure event, an English court may not allow a party to subsequently rely on it as a force majeure event.