Force majeure clause: what it means, a typical example, and what to ask for
A force majeure clause relieves a party from obligations, or gives it more time, when events outside anyone's control intervene: extreme weather, pandemic orders, widespread industrial action, natural disasters. Australian law has no general force majeure right, so you only get this protection if the contract gives it to you.
A typical builder version
The Contractor is not liable for any failure or delay in performing its obligations caused by a Force Majeure Event. The Subcontractor bears the risk of all delays and costs arising from inclement weather, industrial action, epidemics and any other event affecting the Subcontractor's Works.
Illustrative wording of the kind found in builder-authored subcontracts, not taken from any one contract.
What it means for you
The builder is excused when something outside its control happens. You are not: weather, strikes and pandemic shutdowns are your risk, so you can face liquidated damages for delays nobody could prevent.
- Force majeure relief for the builder only.
- Weather, industrial action or epidemics placed entirely on the subcontractor.
- No extension of time for force majeure events, so liquidated damages keep running.
What market looks like
A mutual clause with a defined list of events, an extension of time for any of them that delays you, at least no liquidated damages for those days (costs are often shared or carried by each party), and a right for either party to end the subcontract if the event continues beyond an agreed period.
What to ask for
"Neither party is liable for a failure or delay caused by a Force Majeure Event. The Subcontractor is entitled to an extension of time for any delay caused by a Force Majeure Event, and no liquidated damages are payable for that period."
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Common questions
Is force majeure implied into Australian contracts?
No. There is no general force majeure right in Australian law, and the doctrine of frustration applies only in narrow circumstances. If the contract doesn't include a force majeure clause, you generally don't have one.
Does force majeure cover rain on a building site?
Only if the clause says so. Many subcontracts deal with weather separately, as an EOT event with a minimum number of lost days.
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General information, not legal advice. Example wording is illustrative. Check any clause you rely on against your full contract and your state's Security of Payment Act. Written by Mat Kennedy, The Construction Contracts Co.