When nature makes Louisiana contracts impossible to fulfill

When nature makes Louisiana contracts impossible to fulfill

On Behalf of | Apr 19, 2020 | Contract Disputes |

At least compared to other Americans, many Louisianans may be aware of contract provisions known as force majeure. These are one of a few types of provisions that describe what happens when someone does not fulfill their side of the contract.

Of course, the main reason to draft and sign a contract in the first place is usually to try to hold people to their promises or make them pay a price for backing out. But life is complicated, and we live on a dangerous planet. What happens when events interfere with a contract?

What is a “force majeure”?

The term force majeure means a “superior force,” something more powerful and unpredictable than the signers of a contract.

As Hurricane Katrina and more recent challenges remind us, the plans we sketch out in a contract can simply become impossible for reasons beyond anyone’s control or anticipation. People sometimes think of force majeure provisions as “act of God” contract clauses.

Throughout history and around the country, force majeure-triggering events have included almost Biblical-style tragedies like unprecedented storms, floods, earthquakes and volcanoes as well as infestations of insects, diseases. They even include labor disputes, strikes, riots, terrorist attacks, economic downturns or other events that make finishing that job impossible. Finally, a key worker becoming incapacitated might cause the invocation of force majeure.

Who decides what counts as a “force majeure”?

Two major factors decide what can cause the triggering of a force majeure clause.

As a recent article in the Louisiana Law Review discusses, the state’s legal traditions, laws and court system have ways of interpreting the force majeure language in contracts.

In fact, in some cases, laws and legal decisions allow a party to invoke force majeure even without any such language in the contract at all. This is rare, however, and the LLR author argues that Louisiana has long been far too slow to let people claim the contract is impossible to fulfill.

The other factor, of course, is the language in the contract. Some contracts simply point to the idea of force majeure itself, while others make long lists of events like the one above.

Some contracts may go into some detail about what it could mean for a contract to be “impossible” to fulfill, or they might lower the bar to “impractical” or the like. Contracts may also describe procedures and remedies for such situations.

Negotiating and drafting the terms of a force majeure-clause can help minimize the chance of winding up in court, but there is always at least a remote chance of having to argue for an interpretation of a force majeure provision.