Navigating the Murky Waters of Force Majeure Clauses - A Deep Dive Into Principles Governing Their Interpretation.

Abstract

“Force Majeure” has quite understandably been a buzzword lately, particularly due to the catastrophic events that have afflicted humanity in the past couple of years, ranging from the pandemic to the war in Ukraine. In such a scenario, the business and commercial world has been particularly hard-hit since such catastrophic events make commercial activity a near impossibility.  Therefore, an increase in Force Majeure related litigation due to non-performance of contractual obligations came to nobody’s surprise. However, regardless of the widespread prevalence and importance of Force Majeure clauses in contracts, their interpretation is quite a hefty task due to the problems of ambiguous wordings and non-inclusion of events that cause the non-performance of the contract. This paper seeks to describe and analyse the interpretational doctrines employed by courts to resolve these problems. The first part of this paper will establish and describe in detail the exact nature of the problems that are prevalent when interpreting Force Majeure clauses. The next section analyses the treatment of Force Majeure clauses that omit the event which induces the non-performance of the contract in the first place. This shall be done by probing into the doctrine of Force majeure being a general principle of law, the exhaustive or non-exhaustive nature of the clause and the ejusdem generis principle. The second part will focus on how ambiguous terms in a Force Majeure clause are dealt with by examining both the restrictive and non-literalist approaches towards interpretation of Force majeure clauses as well as the contra proferentem rule. Overall, this article seeks to provide a comprehensive analysis of the problems that are commonplace in the interpretation of Force Majeure clauses as well as the doctrinal tools courts employ to resolve these difficulties.