OCCASI ONAL PAPER No.

21
by P. E. Heal ey BSc BA MI OB AI QS
This
paper is based on the author's entr! lo lhe 1979 lan Mutay
Leslie Awards u/hich rras awatded the Btunze Medal i the
,oung
fiembers' competition. The ews expressed in this pqper are those of
lhe author and not necessarilt lhose of the Inslhule,
D E F I N I T I O N S
Ab initio
From the beginning.
Ejusdem generis rule
This rule is_ that general
words which follow two or more particular
words must be confined to a
meaning of the same kind (ejusdem generis)
as the particular
words.
(See Powell v Kempton
park
Racecourse
Co.
(
lSgt) A.C. 143)
Obiter dicta
There are two types of obiter dicta;
G)
A statement of law is regarded as obiter ifit is based upon facts which either were noi found
to exist, or if found, wete not found to be material.
-
O)
A statement of law which, although basecl on the facts found, does not form the basis ofthe
decision; for example, a statement oflaw in support ofa dissinting. judgerirent.
-
Obiter dicta are not of binding authority but have only pe$uasive
authority.
Prirna facie
On the face of it.
C O N T E N T S
DEFI NI TI ONS
I N TRO D UCTI ON
A DEFI NI TI ON OF FORCE MAJEURE
Act of God
Vi s maj or
Force majeure
LI MI TATI ONS OF
. . . l 0
. . . l 0
. . . l 0
FORCE MAJ EURE
DEFI NI TI ONS OF FORCE MAJEURE FOR CLAUSE 23( a)
OF THE JCT STANDARD FORM OF CONTRACT . . .
APPENDI X I . Extract from the General Contract of the
Grain and Seed Trade Association
Extract from the Standard Trade Customs
issued by the British Paper Mills
Extract from the Contract and Contract
Rules of the Sugar Association of London
APPENDI X I I .
APPENDI X I I I ,
l 5
t 7
l 9
20
2 l
i
t
FORCE MAJEURE
-
An examination of which circumstances are included within Clause 23(a) of the JCT
standard fonh of contract
McCardie J in
Lebeaupin
v Clispin and Companlr stated;
'This
phrase'force majeure has been introduced into
many English commercial contracts within recent years.
It is employed not only with increasing frequency, but
without any attempt to define its meaning or any effort
to co-ordinate the phrase to the other provisions df
documents'.
Clause 23(a) of the Joint Contracts Tdbunal's standard
form of building contract (1963 edition) states;
'Upon
it becoming reasonably apparent that the progress
of the works is delayed, the Contractor shall forthwith
give wdtten notice of the cause of the delay to the
Architect, and if in the opinion of the Architect the
completion of the works is likely to be, or has been
delayed beyond the date for completion stated in the
appendix to these Conditions or beyond any extended
time previously fixed under either this clause or clause
33(1) (c) of these conditions, (a) by force majeure,.......
then the Architect shall as soon as he is able to estimate
the length of the delay beyond the date or time aforesaid
make in writing a fair and reasonable extension of time
for completion of the works. Provided always that the
Contractor shall use constantly his best endeavours to
prevent
delay and shall do all that may reasonably be
required to the satisfaction of the Architect to proceed
with the works'.
INTRODUCTION
The case o_f Yrazu and Another v The Asbal Shipping
Company' appears to be the first reported case concerning
force majeure. Unfortunately, no reference is made in this
case to the reason for its inclusion.
Force majeure clauses were introduced into English
commercial contracts at the end of the nineteenth and
beginning of the twentieth centuries and this is supported
by McCardie J in Z ebeaupin v Richard Lrispin and &mpany
'This
phrase
'force
majeure' has been introduced into
rpany English commercial contracts within recent years',
and bv:
(")
(b)
The Grain and Feed Trade Association who state that
a force majeure clause has been included in their
contracts for the last eighty yean. (See Appendix I)
The National Federation of Building Trades Employers
who have traced its inclusion in the Joint Contracts
Tribunal's (JCT) standard form of building contract
(known then and for some time after as the Royal
Institute of British Architects form of contract)
back to 1909.
English statutes have also included force majeure and similar
clauses, namely the Emplqyment ofwomen, Young Persons
and Childrens Act (1920)r and the Hours of Employment
(Conventi ons)
Act 1936q.
In considering the reason for its introduction it is pertinent
to turn to lhe czse of Bhckburn Bobbin Company Limited
v T ll Allen and Sons Limitecl5 which summarises the
English law of contract in the early part of the twentieth
century. Parts of McCardie J'sjudgement are as follows;
'The
original rule of English law was clerir in its
insistence that where a
party by his own contract
creates a duty or charge upon himself he is bound to
make i t good notwi thstandi ng any acci dent by
inevitable necessity, because he might have provided
against it by his contract;see per curiam Paradine v
Janeb . That principle was applied with full severity
during the eighteenth century . . . . . . . . . The first
true modification of the original rule was created, I
thinl, by the doctrine of commercial frustration'.
The next true modification of the original rule was finally
effected by the decision in Taybr v. Caldwellt . There the
contract was held dissolved by the destruction of its-subject
matter. The doclrlne of Tayl.or v Caldwell was exletded by
Nicholl and Knight v Ashton Edridge and Company6 and
still more strikingly enlarged bv the Coronation cases of
which Krell v Henry
9
is the mo st vivid e xample . ln Krell v
Henry the court held that although a collateral was
important, circumstance was the basis of the contract
between the parties, and that when the basis ceased it
followed that the contract was dissolved'.
I
(1920) 1 KB114 at page 719.
z1l
e04) 20 TLR 153
3Schedule Pt.11 Article 4
'The
provision of Articles 2 and 3 (regarding prohibition of the right to work) shall not apply to
the nightwork of young persons between the ages of 16 and 18 years in cases of emergencies which could not have been
controlled or tbreseen, which are not of a periodical character, and which interfere with the normal working of the industri"al
undertaking'.
4schedule
Pt.l I Article 3
'The
Limits of hours prescribed in paras 2, 3 and 4 of Article 2 (ie working hours) may be exceeded
and the interval prescribed in para 5 (ie rest period) reduced, but only so far as may be necessary to avoid serious interference
with the ordinary working of the undertaking.
a) In the case of accident, actual or threatened, or in the case of urgent work to be done to machinery or plant, or in the
case of' force maj uere' , or
b) In order to make good the unforeseen absence of one or more members of a shift'.
5( 1918)
I KB 540
e(1647)
Aleyt 26
7 ( 1 8 6 3 ) B&S8 2 6 .
8(
1901) 2 KB 126
9(
1903) 2 KB 740. The contract was to hire rooms on Pall Mall to view the Cofonation processions of Edward V I 1. On June
20th Henry agreed in writing to pay f,75 for the hire of the rooms for two days, paying f,25 in advance. The writing did not
mention the procession.
The procession did not take place due to the King's illness, and Henry refused to pay the f50, and therefore, Krell took action
for this amount. The Court of Appeal held that both parties regarded the taking place of the procession as the foundation of
the contract.
This was the situation at the outbreak of the FiISt World
War. At this time tlGre wer a vast number of commercial
contracts which contained no clauses whatver providing
fcr that event. These were obviously based on the
assumption that peace would continue, neither party
contemplating war.10
The difficulty encountered by the courts was to decide to
which circumstances the exception of Krell v Henry colld
be appl i ed;
'I
desire respectfully to add that in my opinion the Krell
v Henry rule should not be unduly extended. It is only
in exceptional cases that it can be safely applied'.
It is submitted that it is against the background of the strict
tule of Paradine v fane, with the very limited exceptions of
the extended rule of Krell v Henry, that such clauses as
force majeure were introduced into English commercial
contracts. Without them, the seller generally would be in
breach ofhis contract with the buyer.
A closer examination of the doctrine of frustration
amplifies this situation, one in which certainty and
justice
may be seen to conflict.
This doctrine operates in three main situations;
(a) Where there is supervening illegality between the
time of making and the time of completing the
contract.
(b) Where the performance ofthe contract has become
impossible through the destruction of the subject
matter, through the death of a party in the case of
a contract of se ice, and through temporary non-
availability.
(c) Where later events destroy some basic assumption on
which the
parties
have contracted.
The doctrine,of frustration has relaxed the strict common
Iaw of Paradine v Jane lhat a corLtracl is made to be
performed.
On examination of the above exceptions, it can be seen that
there may be an overlap with those reasons which may be
covercd by the concept offorce majeurc. For example, in
Denny, Mott and Dickinson Limited v Fraser (James B
)
and
Co. Limitedll the contract was held to be frustrated by the
Cofltrol of Timber (No. 4) Order 1939 which made trading
in timber illegal.
In compadson, in tghtm and Staines Electricity Company
Limited v Eghem Urban District Councl12, it was held that
a Lighting Order of 1939 making the display of street lights
unlawful was due to an unavoidable cause within the
meaning of the force majeure clause.
Why then are force majeure clauses introduced into
contracts, when the occurrence may have been covered by
the common law doctrine of frustration? There are two
possible reasons,
Firstly, courts are now very reluctant to hold that a
contract has been frustrated13. This is supported by the
fact that since the passing of the law Reform (Frustrated
Contracts) Act (1943) no cases of frustrution have been
upheld by the courts.
Secondly, is the effect of a frustrating circumstance
compared with the effect of one reason of force majeure.
At common law the frustrating event brings the contract to
an end forthwith, but the contract is not void ab initio.
Thus at common law, dghts accrued before the event remain
enforceable, but rights not yet accrued are unenforceable.
These rules have been modified by Section 1 ofthe Irw
Reform
(Frusl rated
Conl racts) Act (1943)14.
l0Blackburn
Bobbin & Co. Ltd. v T 14 Allen & Sons Ltcl (1918) 1 KB 540.
'But
it cannot be that all such comracrs were
dissolved by the events of August, 1914. The mere continuance ofpeace was not a condition of the contract. . .. . . The
destruction of a state of peace is not of itself a destruction of any specific set of facts within D/e// v Henry rule. Nor can it be
that grave difficulty on the part of a vendor in procurring the contract articles will excuse him from the performance ofhis
bargain. If such were the case, then the decision of the House of Lords in Tenants (Lancashbe)v
llilnn & Company (1917)
A.C.495 with respect to the force majeure clause there in question would have been unnecessary, for the contract would
have been dissolved by the basic change of circumstances and the principle of Metropolitan llater Board v Dick Kerr and
Company (1918)
A.C. 119 woul d have appl i ed' .
11(1944)
AC 265
t 2(
r 944) AER 107
13(1956)
AC 696. Lord Radcliffe's judgemett
in Davis Contrsctors Ltd v Farcham UDC.
14'Sl (i) Where a contract governed by English law has become impossible of performance or been otherwise frustrated, and
the parties thereto have for tlnt reason been discharged from the further performance of the contract, the following provisions
of this section shall, subject to the provisions of section two of this Act, have effect in relation thereto.
Sl(ii) All sums paid or payable to any pady in pursuance of the contmct befoJe the time when the parties were so discharged
(in this Act referred to as
'the
time of discharge') slnll, in the case of sums so paid, be recoverable fiom him as money
received by him for the use of the party by whom the sums were paid, and, in the case of sums so payable, cease to be so
payable:
Provided that, if the party to whom the sums were so paid or payable incurred expenses before the time of discharge in, or for
the purpose of, the performance of the contract, the court may, if it considers it
just
to do so having regard to all the
circumstances of the case, allow him to retain or, as the case may be, recover the whole or any palt of the sums so paid or
payable, not being an amount in excess of the expenses so incuned.
S1(iii) Whete any party to the contract has, by reason of anything done by any other party thereto in, or for the purpose of,
the performance
of the contract, obtained a valuable benefit (other than a payment of money to which the last foregoing
subsection applies) before the time of discharge, there shall be rqcoverable from him the said other party such sum (if any),
not exceeding the value of the said benefit to the party obtaining it, as the court considers
just,
having regard to all the
circumstances of the case and, in particular,
-
(a) the amount of any expenses incurred before the time of discharge by the benefitted party in, or for the purpose of, the
performance of the contract, including any sums paid or payable by him to any other party in pursuance of the contract and
retained or recoverable by that party under the last foregoing section, and
(b) the effect, in relation to the said benefit, of the circumstances giving rise to the frustration of the contract.
8
However, where the circumstance is one of force majeure;
the resultant effect of this circumstance depends on the
wording of the contract in which it is included.
In many commercial contracts, it is both in the interests of
the buyer and the seller that the contract be fulfilled, albeit
delayed by reason of force majeurerJ.
Thus it can be seenlr that the force majeure clause operates
to keep the contract alive, albeit in cedain cases for a
limited period. This may favour either the buyer or the
seller, or both.
In the case of a building contract, it makes sense
economically to keep the contract alive. For, if the delaying
occurrence would have constituted a frustrating event and
there was no force majeure claus, then the buyer (client)
would have to seek an altemative seller
(builder)
to
complete the works. This would cost him more money, and
it is likely that the delaying event would effect the new
builder in a similar way as it affected the original builder.
Thus the client would be no better off.
Alternatively, if the delaying occurrence would not have
constituted a frustrating event, then the builder would,
without the force majeure cla[se, have been in breach of
contract by not completing on time. The client would,
therefore, have to seek damages against the builder.
Because of the force majeure clause, the contmct is neither
frustrated nor breached.
An extension of time should be
granted covering the time
of the delay, but with no monies being payable to either
the client or the builder: each side, therefore, bears its
own costs. Thus, at worst, a force majeure clause protects
the
party who otherwise would haYe been in default and
therefore liable, and at best keeps the contract alive which
may otherwise have been breached, or possibly in cases of
frustration. dissolved.
This is supported in t]ne case of FairclDugh, Dodd and lones
Limited i i. H. vantol Limitedl6 .
A DEFINITION OF FORCE MAJEURE
It Thonas Borthwick (Glasgow) Limited v Fauvre and
Fairclough Limited, per Donaldson J.17
' The
preci se meani ng of thi s term
(that
i s. force maj eure)
has eluded the lawyers for years. Commercial men
have no doubt as to its meaning. Unfortunately, no two
commercial men can be found to agree upon the same
meaning, so perhaps in this as in so many other matters
there is very little difference between the commercial
and legal fraternity'.
A complete definition of force majeure cannot be given,
therefore, because of the reasons given in the case above
and as will be shown below, it will vary according to the
context in which it is written.l8
Further variations to the meaning of force majeure in
different contexts will operate by the application of the
ejusdem generis rule which will generally limit its use.
These variations and limitations will be examined later.
What definition, therefore, can be put on force mdjeure?
To investigate this learned texts and case law are reviewed
to determine what events are covered by force majeure,
At the end, a definition will put forward, solely in the
context of clause 23(a) of the JCT standard form of
building contract.
Before pursuing a definition further, three terms need
to be distinguished, these are: acts of God, vis major and
force majeure.
It will be seen that the circumstances covered by the term
force majeure
generally include the other two terms;
however, acts of God and vis major may not include all
circumstances
generally covered by force majeure.
Contracts, especially older ones, sometimes included vls
major provisions, and more frequently, acts of God clauses,
and therefore it is necessary to distinguish between
circumstances included by these two terms and those
covered by the force majeure concept.19
i5In
the British Paper and Board Trade Customs, the force majeure clause allows for suspension of the contract. Where the
delay ends within one month after the stipulated delivery date, then the contract shall recommence. However, delay of longer
than one month allows either party to cancel the portion of the contract affected by delay. Thus both parties are offered
protection under this clause. (See Appendix II).
Clause 23 of the Joint Contracts Tribunal standard form of Building Contract allows for extensions of time to the contract
period due to reasons of force majeure.
Clause 21 ofThe Grain and Feed Trude Association General Contract No. I provides for extensions of time to the shipping
peiiod of one month due to the occurrence of force majeure after which the buyer has an option to cancel, and if he does
not take up the option, then the period is further extended by one month. If the shipment is then still prevented, then the
contract shall be considered void.
It is interesting to note that although this clause favours the seller, it gives the buyer certain advantages. He has the option to
cancel, but more important, during the option period he can watch the market and only exercise the option to cancel if the
markt goes against him;for example a fall in the price in the commodity he is buying.
16(1955)
I WLR 1302 Parker LI in the Court of Appeal did not define
'force
majeure' but merely stated the function of it
and when it operates;
'Whether
viewed as a clause which extends the time for shipment or as an exception clause, it is a
clause which operates to prevent what otherwise might be a breach from being a breach. Such a clause would normally, at any
rate, not be construed as being operative, unless in its absence, the party protected would have been in breach.'
17(1968) 1 Ll oyd Report 16. page 28.
lSBritish Electricsl snd Associated Industries v Pqtle! Pressings Ltd. (1953) 1 WLR 280.
'For
example, a term of a contract
'the
usual force majeure clauses to apply'has been void for uncertainty'.
lgMatsoukis
v Priestmnn and Company (1915) I KB 681 per Bailhache J.
'A1
the same time I cannot accept the argument
that the words (force majeure) are interchangeable with vis major or act of God. I am not going to attempt to give any
definition of the words force majeure, but I am quite satisfied that I ought to give them more extensive meaning than act
of God or vis major. The difficulty is to say how much more extensive'.
ACT OF GOD
An act of God excuses a party under a contract frodl
liability which that party would otherltise incurred.20
Hal sburys Laws defi nes act of God as;
'An
extraordinary occurrence or circumstance which
could not have been foreseen and which could not have
been guarded against, or, more accurately, as an accident
due to natural causes, directly and exclusively without
human intervention, and which could not have been
avoided by any amount of foresight and pains and care
reasonably to be expected of the person sought to be
made liable for it, or who seeks to excuse himself on
the ground of it. The occurrence need not be unique,
nor need it be one that happens for the first time, it is
enough that it is extraordinary, and such as could not
reasonably be anticipated, The mere fact that a
phenomenon has happened once, when it does not
carry wi th i t or i mport any probabi l i ty of a recurrence
(when in other words, it does not imply any law from
which its recurrence can be inferred) does not prevent
that phenomenon from being an act of God. It must,
however, be something overwhelming and not merely
an ordinary accidental ctcumstance and it must not
arise from the act of man'.
Thus, an act of God is something totally beyond the powers of
of human control. It must also be something which is
extraordinary2l
,
outside the scope of usual or normal
occurrences, which could not have been reasonably
foreseen, prevented or guarded against.22
The occurrence need not be the fust time.23
Examples of occurrences held to be an act of God are as
follows:
a. Accident
b. Storm and tempest
c. Earthquakes and other convulsions of nature
d. Extraordinary flood or tide
e.
Lightning
f.
Unprecedentedrainfall
g. Fire caused by lightning
h. Extraordinary frost
i. Extraordinary snowfall
j.
Death
k. Lunacy
Examples of occurrences held not to constitute an act of
God are;
a. Fog
b. Ordinary fall of snow
c. Fire not caused by lightning
d. Gnawing by rats of a hole in a pipe of a ship through
which sea water came in damaging cargo.
Vis major
The Dictionary of English Law defines vis major as'such a
force as it is practically
impossible to resist, eg a storm, an
earthquake, the acts of a large body of men, etc. The
doctrine ofvis major is that a person is not liable for
damage if it was directly caused by vis major. Vis major
includes many things described as the act of God.'
Thus, the difference between act of God and vis major is
that act of God is an event or accident due to natural
causes, directly and exclusively without human intervention,
whereas vis major is an irresistable force, which may or may
not be with human intervention.24
Pdma facie, therefore, there may be little distinction
between vis major and force majeure,
Force majeure
The first case law on this subject appeared at the beginning
of the 20th century.25
2lRiver Wear Commissbn rt lUilliam Adamson and others. (1877) 2 AC 743 per Lord Cairns LC.
'If
a duty is cast upon an
individual by common law, the act of God will excuse him from the performance of that duty. No man is compelled to do
that whi ch i s i mpossi bl e' .
2loakley
I The Portsmouth and Ryde Stam Packet Co. (1856) l1 Exch.618 per Martin B.'The Act ofGod means
something oyerwhelming and not merely an accidental circumstance'.
22Pandorf
v Hay'niltor (1886) 17
QBD
670 per l,ord Esher MR'I shall not now enter into a discussion which at one time was
rather rife, as to what $r'as the exact meaning of the term of'act of God'. In the older, simpler days I have myself never had
any doubt but thafit did not mean the act of God in the ecclesiastical and biblical sense, according to which almost
everything is said to be the act of God, but that in a mercantile sense it meant an extraordinary circumstance which could not
be foreseen, and which could not be guarded against'.
The proof required regarding the amount of protection which the person relying on an act of God clause must afford was seen
h Nugent v Smithby Mellish.'Ll at page 441;
'I
think, however, that in order to prove that the cause of the loss was irresistible,
it is not necessary to prove that it was absolutely impossible for the carrier to prevent it, but that it is sufficient to prove that
by no reasonable precaution under the circumstances could it have been prevented.
per Cockburn C J
'In
other words, all that can be required of the carrier is that he shall do all that is reasonably and
practically possible to insure the safety of the goods. If he uses all the known means to which prudent and experienced
carriers ordinarily have recourse, he does all that can be reasonably required of him; and if, under such circumstances, he is
overpowered by storm or other natural agency, he is within the rule which gives immunity from the effects of such vis major
as the act of Cod'.
23Nitro-Phosphate
and Oclhams Chemical.Manure Co v London & St. Katherine Docks Co. (1878) 9 ChD 503 per Fry J
'I
do
not think that the mere fact that a phenomenon has happened once, when it does not cafiy with it or import any probability
of a recurrence
:
when, i6 other words, it does not imply any law from which its recurence can be inferred
-
places that
phenomenon out of the operation of the rule of law with regard to the act of God. In order that the phenomenon should fall
within that rule is not . . . . necessary that it should be unique, that it should happen for the first time;it is enough that i1 is
extraordinary and such as could not reasonably be antiiipated. . . . To say that a thing could not reasonably have been
anticipated iS to say that it is the act of Cod'.
24 Simmons v Noitb, (1831) 7 Bing 640. In this case which decided that vis major includes act of God and
Queen's
enemies,
Tundall C J stated
'Here,
if the surface of the meadow had been destroyed by the erruption of a moss, or enemies had landed
and dug it up, that would have been no waste, but'the act ofGod, or ofa hostile force, that vis major for which the defendant
is not resoonsible'.
25Yrazu
snd Anothbr v The Astal Shippr'ng Co. (1904) TLR 153.
' t0
The leading case, if only that it summadses some events
whi ch may fa l l i nto tl e concept of force mai eure. i s
Lebeaupin v Richard Oispin and Complfljtzo where
McCardie J'approves' the statement
(rather than definition)
of Goirond2T which is as follows;
'force
majeure. This term is used with reference to all
circumstances independent of the will of man, and which
it is not in his power to control, and such force majeure
is sufficient to
justify the non execution of a contract
Thus war, inundations, epidemics, are cases of force
maj eure;i t has even been deci ded that a stri ke of work'
men constitutes a case of force maieure'.
McCardi e J sai d of thi s starement28;
'This
is a wide deflnition, but I think that it usefully,
though loosely suggests not only the phrase as used on
the Continent, but also the meaning of the phrase as
often employed in English contracts'.
There is one comment to make on Goirond's definition He
states that force majeure applies to events independent of
the will ofman- This at first suggests
'acts
of God'. However,
he includes in his definition, wars and strikes. These
situations are certainly not independent of the will of man29,
they are man made.
Goirond's definition can be distinguished, and this is
supported by subsequent cases26, in that the term force
majeure can be usd with reference to circumstances
independant to the will ofthe padies to the contract, and
which is not in their
power to control,
Those cfucumstances held to be by reason of force majeure
will now be examined.
(a) Direct legislative or administrative interference
in Lebeaupin v Clispin,McCardie J26 gave numerous
examples of what he coosidered to be force majeure;
'Any
direct legislative or adminislrative interference
woul d, of course, come wi thi n the term;for exampl e,
an embargo' .
A further case regarding
govemment interference, which is
more informative, is that of C Czamikow Limited v Centrdh
Handlu Zsgranicznego
'Rolimpex'30
Lord Denning examined
two situations:
(t) Where neither of the contracting parties was the
government department concemed;
(ii)
Where the defaulting
pady was the govemment or
government department,
Lord Denning held that in this case, neither of the parties
was the
govemment or government department, and held
that the failure to supply the sugar was outside the seller's
cont r ol . 3o, 3l
However, he stated obiter32 that if the seller was held to be
a department of the govemment, then it could not reply
upon the clause.
(b)
Act of Parliament
One step further from govenment interference is legislative
effects.
In the case of Egham and Staines Electricity Company
Limited v Egham Urban District Councilr3 there were
t}lree contracts where the appellant company agreed to
supply electricity to the respondent council for street
lighting purposes, subject to clause 15.34
Everything went smoothly until the outbreak of war, and
the Lighting (Restrictions) Order 1939, the Lighting
(Restrictions) Order (No. 2) 1939, and the Lighting
(Restri cti ons
)
Order 1940, made the di spl ay ofl i ghts i n
t}le streets unlawful, The respondent council therefore
ceased to consume the greater proportion of the current,
hitherto supplied by the appellant and thereforce reduced
his payment.
It was held that the inability of the company to light the
lamps was due to an unavoidable cause (ie lighting orders)
within the meaning ofthe force majeure clause.35
26rL920)
2KB 715.
27
doniOND French commercial law, 2nd edition.
p854.
'28Lebeaupin
v Oispin.
Q92A)
2KB 715. Mccardie J stated
'That
learned Judge' (ie Bailhache J i1 Matsoukis v Priestnan)
'was,
if I may respectfully say so, clearly right when he said that the phrase
'force
majeure' was not interchangeable with
'vis
major' or
'the
act of Cod'.
It goes beyond the latter phrases'.
2gDuncan
Wal l ace, I.N. Hudson' s bui l di ng contracts. l oth edi ti on, p.359.
' Force
maj eure . . . . . i t covers a wi der cl ass of events
than act of God' .
30( 1978)
I AER 81.
31Ibid p9l.'I cannot think they should be made liable in that situation, when there was absolutely nothing they could do.
They had done everything thatihe contract required them to do. It was only the ban, that is the
'government
interyention'
which prevented the shipment. It was a clear case of force majeure'.
32Ibi d. p89.
33( 1944) 1 AER 107.
34lbid.
'L,astly
it is hereby agreed that no default by the company under this agreement shall render the company liable in
damages if and so far as such default shall arise or be occasioned by reason of fire, frost, accident, strikes, lockouts, a
comblnadon ofworkmen or from any other unavoidable cause over which the company has no control. Provided always that
all payments under this agreement by the council shall abate in the same proportion as the supply shall be curtailed by reason
of any event provided for in this clause'.
35This
case is further supported by case law where parties to contracts not containing force majeure, or similar clauses were
held not to be in breach where they have acted according to an Act of Parliament, enacted subsequent 10 the making of the
contract. This was s o held in Baily tt de Oespign! (1869) L R 4
Q
B 180; on the principle ofthe maxim'lex non cogit ad
impossibilia. (ie the law does not recognise impossible things). In this case The l-ondon, Brighton and South Coast Railway
'
(new lines) Ait (1862) gave a railway company power to compulsorily
purchase from the defendant and build upon land
which the defendant covenanted not to build on. The defendant covenantor was held not to be liable to the plaintiff
covenantee for breach of covenant
1 1
(c) Breakdown of machinery
ln Matsoikis v Priestman the co.ntrcct provided for the
construction of a boat to be delivered on or before the
28th February, 1913, subj ect to a force maj eure cl ause.36
The construction of the boat was delayed for several reasons,
one of which was due.to a breakdown ofmachinery,
Bailhache J considered that this came within the words force
majeure as force majeure cedainly covered accidents to
machinery.
This begs the question ofwhether force majeure would
cover breakdown of machinery due to lack ofmaintenance,
that is self-induced breakdown, or even
'fair,
wear and tea/?
It is inevitable that machinery will break down at some time
during its working life, whether it is maintained or not. As
argued by the counsel for the plaintiff3T
'Breakdown
of machinery does not come within the
words force majeure. A breakdown ofmachinery is a
usual occurrence and must have been taken into account
by the defendants in considering the length of time they
would require for the building of the steamer'.
It seems that this decision of Bailhache J must be strictly
limited to breakdowns caused by accident. Unfortunately,
the facts of the case do not assist as they do not state the
cause of the accident which made the machinery breakdown.
(d) Accident or casualty
This is a continuation from the reason of breakdown of
machinery through accident.
These events, which would have been held to fall within
the meaning of force majeure are cited from the case of
Yrazu and Another v The Astral Shipping Company3S
which included a force majeure clause.39
The vessel called in at a port because the master
miscalculated the quantity of coal which was needed to
complete the
journey,
thus delaying the
journey
and
causing a deterioration in livestock. It was held by Walton
J that an accident or casualty would amount to force majeure.
However, running short of coal due to the master's mistake
did not amount to an accident because'the ship and cargo
were never in any actual and immediate danger', and was
nol . therefore. force maj eure.
Walton J gave an example of accident;
'If
the deficiency of coals had arisen from some accident,
if for example, it had been necessary to
jettison
coals, I
think it would have been a case of force majeure within
the meaning of the clause'.
The reason of'casualty' was also included in Goirond's
definition40;
' . . . . t hus. . . .
epi demi cs, ar e causes of f or ce maj eur e. . . '
which was approved by McCardie J in I ebeaupin v Cispin
(e) Extraordinary bad weather
In Matsoukis v Priestman, another rcason for the delay was
bad weather. Bailhache J41 held that;
'The
term force majeure, cannot, however, in any view,
be extended to cover bad weather . , . .
These are the usual incidents interrupting work, and the
defendants, in making their contract, no doubt took
them into account',
Unfortunatly, the facts given in the case do not state how
bad the weather was nor what type of bad weather it was.
Thi s di sti ncti on was made by McCardi e J i n Lebeaupi n v
Cri soi n42
'In
the Matsoukis case Bailhache J seemed to have ruled
that delay caused by bad weather was not within the
force majeure clause. But he was there dealing with the
particular facts, and I conceive that normal bad weather
is one thing, whereas abnormal tempest, storm or the
like, may be another thing and might well fall within the
force majeure clause'.
Therefore, it is considered that exceptionally bad weather
may fall within the words force majeure. This is also
supported by the section covering the act of God. In that
case, storm, tempest, an extraordinary fall of snow, and an
extraordinary frost werc all held to be acts of God. As force
majeure is deemed to be wider than act of God, such
circumstances should, therefore, fall within the meaning
of force majeure.
(f) Seizure of a ship
In the Turul43 upon the outbreak of war, an enemy ship
was seized in the port of New South Wales, her charts and
papers removed and a watchman placed on board. After
this seizure, a proclamation was made granting nemy ships
a period in which to depart. The master of the ship was not
informed by the proclamation, or otherwise, that upon his
applying for a pass the ship would be put in a position to
ceparr.
The Privy Council held that the ship was unable to leave
'by
circumstances beyond its control' (force majeure)
within the meaning of article 2 of the sixth Hague
Convention.44
. !
36'If
the said steamer is not delivered entirely ready to purchaser at the above mentioned time, the builders hereby agree to
pay to the purchaser for liquidated damages, and not by way of a penalty, the sum of fl0 sterling for each day of delay in
the deduction of the price stipulated in this contract, being excepted only in the case of force majeure, and/or strikes of
workmen of the building yard where the vessel is being built, or the workshops where the machinery is being made, or at
the works where steel is being manufactured for the steamer or any works of any sub-contractors'.
37(
1915) I KB 681.
3 8Duncan
Wallace in Hudson's building contracts, 1Oth edition.
39lbid
'The
vessel has liberty to deviate for the purpose of saving life or property, but not to call at aoy port or ports before
landing her livestock except in the case of force majeure'.
40GOIROND.
French commercial law. 2nd edition.
4l ( 1915)
1 KB 681 p687
42(
1920\ 2 KB 7 19
43( 1919)
AC 515
44'Par
suite de circonstances de force majeure, n'aurait pu quitter le port enemi pendant le de lai vise a l'article precedent'
(i.e. whether the ship because of reasons of force majeure could not have left the enemy port dudng the period mentioned in
the preceding article).
(g)
General dislocafion of the supplier's
qusiness
The main reason foi:the delay in the case Matsoukis v
Preistman was l]r.e 1912 universal coal stdke. The works
where the defendant obtained its materials for other ships
it was building fell behind. As a result, the ship to be built
before the plaintiffs occupied the berth that was intended
to be occupied by the plaintiffs drip much longer than it
otherwise would have done, and consequently, the plaintiffs
boat was late in being laid down, and threfore late in
delivery.
Bailhache J4s held that this delay did fall within the
reasonable meaning of force majeure.
(h)
War
Many commercial contracts today contain their own
provision against the outbreak of war, However, one case in
which a force majeure clause was included but a war
provi si on di d nol exi st was i n Zi nc Corporoti on v Hi rsch46
War broke out, and the seller claimed suspension of the
contract.
On the question of whether the force majeure clause 17
included war, per Swifen Eady L J47;
'The
term force majeure as used on the Continent of
Europe includes war; Calvo Dictionnaire de Droit
International, force majeure
;
Dalloz Juispuidence
Generale, tome 24 page 755 article
'force
majeure'
Goirond's French Commercial law, 2nd edition page
834. Whether the expression has the same meaning in
this contract is another matter. but war is a cause
beyond the control of either party preventing or
delaying the carrying out of the agreement'.
It is considered, therefore, that war, unless expressly
excluded or included for elsewhere in the contract, would be
covered by the words force majeure. This is endorsed by
Goirond's48 definition approved by McCardie J in
Lebequpin v Crispin49
45
:It was not, however, the direct operation ofthis st ke which caused the damage. What did cause the damage was the
general dislocation of the defendant's business and the business of the manufacturers of steel plates, etc. in the north, and in
those cfucumstances, I think I amjustified in saying that did constitute a case of force majeure. Of course, if I were to give the
words the full meaning attributed to them by the Belgian lawyer there would be no doubt about the matter, but giving them
a more restricted meaning I think that the complete dislocation of business in the north of England as a consequence of the
universal coal strike, which operated directly on the ship in turn for building previously to the plaintiffs steamer, and only
indirectly on the plaintiffs steamer, did come within the reasonable meaning of the words force majeure'.
46(1916)
1 KB 541 Clause l7 of the contract provided
'In
the event of (inter alia) any sttike, suspension of labour, floods,
fire, stoppage of water supply, act of God, force majeure, ot any cause beyond the control of either the seller or the buyer
preventing or delaying the carrying out of the contract
'then
this agreement shall be suspended during the continuance of any
and every such disability.
47(1e16)
l KB 541 p554
a8
GOIROND. French commercial law. 2nd edition.
4e(
19 201 2 KB 7 t9
so' GOIROND.
French commerci al l aw. 2nd edi ti on.
sr(
1920\ 2 KB 7 19
52(1922)
1 KB 431
53Under the Hackaey Electric Lighting Order (1893), the council were bound to give a supply of energy to premises in their
district, subject to clause 26 which provided;
'Whenever
the undertakers make default in supplying energy to any owner or
occupier of premises to whom tiey may be and are required to supply energy under this Order they shall be liable to a penalty
not &ceeding forty shillings in respect of every such default for each day on which any such default occurs . . . provided . . .
that in no cale shail any penalty b; inflicted in respect of any default if the court . . . shall be of opinion that such default
was caused by inevitable accident or force majeure . . .'
Two of the iouncil's workmen refused to do the work required, because the wiring of Dore's house had been carried out by
a man who was not a member of a trade union; that if the council had dismissed these men the result would probably have
been that the Electrical Trades Union would have caused all their members in the council's service to terminate their
engagments; that if this had occurred it would have been difficult for the council to get other competent workmen; and that
any interference with the council's undertaking by the withdrawal of their workmen would have seriously affected the whole
district. The council contended that they were not liable for the penalty under clause 26, as any default on their part was
caused by circumstances amounting to force majeure.
At the fiist hearing the Magistrate held that the meaning of force majeure applied only to physical or material constraint and
that although it had been held that the exprssion applied to stdkes actually proceeding, to war, and to breakdown of
machinery, it had never been held to apply to fear, however reasonable, of the oonsequences of threalened actioo.
5a(1960)
AC 684 p690 (Pri vy Counci l )
' Thus
war., - . . are cases offorce maj eure'
(i)
Strikes
Again, Goirond's definition50 of force majeure approved
by McCardie J in Z ebe(rupin v Oispinsr, included strikes
as a reasonl
'.
. . . . it has even been decided that a strike of workmen
constitutes a case of force majeure'.
It washeld, it Hackney Borough Codncil v DoreS2 that a
strike would, if the circumstances allowed (ie there were not
constraints such as the ejusdem generis doctrine), amount to
force rnajeure, but that reasonable apprehension of a strike
did not amount, in itself, to force majeure.53
There are several evenis held by the courts not to fall under
the words of force majeure. These are as follows:
(r) Events which are within the confol of the party
relying on force majeure.
ln Hong-Guan and Company Limitecl v R lumabhoy
qnd
Sons Li mi ted Der [,ord Morri s of Borth-v-Cesl 54
' So
far as the cl ause deal s wi th force maj 6ure i t
appears to be designed to protect the respondents
from liability in the event of their being prevented
from performing the contract by circumstances
beyond their control'.
(ii) Thos events which are common or usual events which
can be expected to occur in industry
Such circumstances as employees attending the
funeral of their shipyard manager, and employees
attending football matches were held not to be by
reason of force maj eute tr Matsoukis v Priestnan
because as stated by Bailhache J.
'These
are usual incidents interrupting work, and
the defendants, in making their contract, no
doubt took them i nto account' .
I
t \ t
(iii)
Events which the parties are, or should be aware of
Drior to. or at the time of making the contract
inlohn Batt and Company
(I'Qndon
)
Limited v
Brooker, Dore and Company Limited,
per Atkinson
J55;
'
. . . . it seems to me perfectly plain that the
clause
(ie foice majeure) did apply and that
performance was quite impossible from causes
over which the seller had no control, and I can
see no
justification whatsoever, for the
suggestion that they cannot rely upon these
causes because they ought to have anticipated
them and foreseen them'.
Atkinson J, however, said that he would have taken
the opposite view if there was evidence that the
seller ought to have anticipated the incidents.
However, this may be limited by the strict words
of the contract,
Prima facie, events which the party is, or should
be aware at the time of contract cannot be pleaded
as force majeure. However, if as in Readon Smith
Line v Minister of Agriculture16 ,
it car, be shown
that both parties were aware of the fact, and the
intention was that the event could be relied upon
as falling within the meaning of force majewe,
then it shall so be.
(iv)
Price increase
Al increase in price of the commodity being sold,
or i n t he met hod of t r anspor t at i on or any ot her
associated increase will not come within the
meaning of force majeure'
The reason for this is that the contract is still
capable of being performed albeit at a higher pice
to the seller.
In the case of Tenants
(
Lancashire
)
Limited v C' S.
llilson and CompanyS? I-ord loreburn held58;
'By
hindering delivery is meant interposing
obstacles which it would be really difficult
to overcome. I do not consider that even a
great rise of prices hinders delivery. If that had
been intended different language would have
been used, and I cannot regard shortage of cash
or i nabi l i ty to buy al a remunerati ve
pri ce as a
contingency beyond the sellers control' The
argument that a man becomes excused from
performance
of his contract when it becomes
'commercially'
impossible . , . . seems to be a
dangerous contention, which ought not be
admitted unless the parties have plainly
contracted l o I hal efl ' ect"
This is also the implication from the case of Bunten
and Lancaster Limited v Wiltshire
Quality
hoducts'9
Limited
59
dnd Brauer and Compsny v James Clark
pet
Sellers J6o
'.
. . the sellers admitted . . . that they could have
shipped, declared and tendered the contract
goods within the contractual date if they
(themselves) had paid the minimum price. On
this admission, the sellers cannot, in my opinion,
rely on force majeure. There is no prohibition,
no physical or legal prevention. The goods
could, therefore, have been exported'.
(vi) Failure of the subject matter when other suppliers
are available
ln Bunten and Ldncsster v Wilts
Quality
hoducts
Limited, the seller failed to supply kerasund
hazelnut kernels as contracted for, The contract
c contained a force majeure clause.61
The seller claimed tlnt he was entitled to cancel
the contract by reason of force majeure, because
the annual crop produced was approximately one
third below the average annual production, which
resulted in a price increase.
It was held per McNair J62;
'It
is quite clear on the evidence that there was
not the slightest difficulty for any buyer in the
autumn of 1950 (at the material time of deliyery
under this contract) to buy goods of the contract
description provided he was prepared to pay the
market price for them. There is nothing to
suggest to me that there is anything abnormal
in the market fluctuations that took place in this
case. I therefore am quite unable to infer that
the sellers' reason for failing to deliver was failure
of crop, or force majeure, or any matter of that
kind'.
The circumstances examined above illustratethose events
which the courts have beemed force majeure clauses to
cover, and also those which do not constitute force majeure.
Two overriding facton may be added to this;
Firstly, although one or other of the above events may
occur, it does not necessarily mean that the force majeure
provision will operate. For example, it may be possible to
fulfill the contractual obligations in some other way, despite
the fact that the event has occuned. In other words, in order
for such a plea to be successful, tlte contract must be
impossible to carry out due to this event.
This was highlighte d in Hackney Borough Council v Dorc
per Branson J63
'In
my view force majeure cannot be established by
showing that the consequences of doing the act which
would be suffered by the person dying upon the
clause would be unpleasant, tuoublesome or perhaps
disastrous. In order to succeed, the appellants must
show that what the statute ordered them to do has
become impossible;it is not enough for them to s4v
that it has become inconvenient or unpleasant for them
to do i t' .
The second factor leads directly from the first, namely that
the party relying on the clause must do all that is reasonably
possible to prevent the delay from occurdng.
ss(1942) Ll oyds Li st L R Vol 72, 149,p157
s6(t962)
2 AER 577
s1(1917)
AC 49s
58I bi d p510
se(1951)
2 Ll oyds Rcp 30
60(19s2) 2 AER 497
611-
'This
contract is subject to the usual force majeure clauses of this country and of the country of origin of the goods.
2. Notwithstanding anithing aheady stated in this contract sellers reserue the right to delay delivery or shipment and/br
cancel without claim on either side thi unshipped and/or undelivered
portion of this contract in the event of their seller,
failing to ship or deliver on account of stdke;, civil commotions, war, civil war, failure of crops, force majeure etc,, and/or
contdbutory causes.
62(1951) 2 Loyds Rep 32
63(1922) 1. KB 431 p438
1 4
This is established in the case concerning act of God, namely
Nugent v Smith64 .
There is one miscellaneous point regarding contracts
including a force majeure clause which is of interest.
A force majeure clause, on its proper construction may allow
the court to take account of the promisor's obligations
under other contracts despite the fact that, as a rule, it is
no excuse that contacts with third parties prevent the
fulfilment of the contract in question.
This was so held in Pool Shipping Company Limited v
Lond.on Coal Cornpany of Gibraltar Limited6S
, where
there was a contract for the supply of steamer coal subject
t o;
'In
the event of any cause of circumstance beyond the
control of the sellen and/or suppliers of whatever
description . . . which prevents the supply, shipment,
carriage or delivery of all , . . . coal herein contracted
for . . ., or the normal working of this contract, sellers or
suppliers shall be entitled to relief from all obligation
under this contract,
It was held that in construing the phrase
'normal
working
of the contract', the court was entitled to look beyond the
buyer and seller and consider the seller's commitments
under contract with other buyers, and in the circumstances,
the normal working of the contract was prevented.
In this case it was held that the defendants were entitled,
provided the shortage was due to causes beyond their
control, to equalise the shortage of delivery among all their
contracts. This is what is called the
'normal
working of the
contract', and in the circumstances of the case. this normal
way of carrying out the contract is held to be the couect
method, and one which the defendants were entitled to
adopt.
It is interesting to note that in the United States of America
52-615 of the Uni versal Commerci al code i mposes on the
seller the duty to allocate his output among his purchasers
in such a manner as he may determine to be'fair and
reasonable'.
LIMITATIONS OF FORCE MAJEURX
A further three possible limitations additional to those
mentioned in the previous section will be discussed, namely:
(a) Ejusdem generis rule
In many commercial standard form contracts circumstances
which are deemed to be force majeure under that contract
are often stated.
Where this is the case, then ary general words or other
nonstated circumstances which are claimed to constitute
force majeure will be read, ejusdem generis with the
circumstances which are stated.66
(b) Force majeure held void for uncertainty
The case of British Electrical (Cardiff)
Limited v Patlq)
LYessings Limited61 is one widely cited58 to illustrate that
a term'the usual force majeure clauses to apply' is void for
uncertainty,
It is considered that this may be too liberal an interpretation
of the decision in the case. The terms of the contract in
relation to the sale of steel contained the following clause;
'Subject
to force majeure conditions that the
lovernment
restricts the export of the material at the time of delivery'.
At the time of the contract, there was a variety of force
majeure conditions in the trade, but there was not evidence
that any particular ones had been agreed upon.
The plaintiff brought an action against the defendant for
repudiation of an agreement to sell steel. The defendant
alleged that the force majeure clause stated above was so
uncertain as to render the contract unenforceable, since
there was in the trade, vadous force majeure clauses and
no agreement had been reached between the parties as to
which of such consitions should apply.
r
6c(1876)
1 CPD 423
6s(1939)
2 AEF. 432
66M4tsoukk
v hiestmqn. (1915)
1 KB 681. The exception clause
gave an exception as force majeure, and the other as
'.
. . .
strikes_ of workmen of the building yard where the vessel is being built, or the workshops where the machinery is being made,
or at the works where steel is being manufactured for the steamer, or any works of the sub-contractor'.
One of the causes of delay was the coal strike, which delayed the mamufacture of materials, thus delaying the construction of
the boat being built in the berth which the plaintiffs boat would occupy.
Per Bailhache J at pages
686, 687;
'If
it (ie the detention of the berths;f the
previous
baot) had been the direct result of the
coal strike, there would have been great difficulty in saying that ihe case cami within the exception clause, seeing that certain
strikes are there particularly
mentioned. It would have been difficult to hold that another strike operatins directlv uDon this
shi p ought ro be added to the speci fi c stri kes menti oned i n the cl ause' .
In the Concadora (1916) 2 AC 1994 202, per l-ord Parmoor;
'I
take it that a force majeure clause should be construed in
each case with a close attention to the words which precede or follow it, and with a due regard to the nature and general
terms of the contract. The effect of the clause may vary with each instrument,.
In Re An Arbitration Between the Podair Trading Company Limited; Bombay and Francois Tagher, (1949) 2 KB 27
j
& 281,
per Lord Goddard C J.
'In
rule 53 force majeure is used in reference to
'timely
fulfilment' of thi coniract and I should have
thought that force majeure in that connection must be construed as being ejusdem generis with the causes of delay previously
menti oned' .
I-ord Goddard conti nued; at page
286;' . . . and i n our opi ni on the expressi on force maj eure must al so be construed wi th
regard to the-words whi ch precede
or succeed i t' .
Finally
,
in Fenwich and Schrnalz (1868)
L R 3C p316, the contract provided for the defendant to load the plaintiffs ship
wi th coal i n regul ar and customary tum.
' except
i n the crse of ri ots,i tri kes, or any other acci dents beyoncl hi s control ' whi ch
might pre,vent
or delay the loading. The defendant pleaded
that a snowstorm previnted loading.
Held per
Willes J;
'Was
the snowstorm, however,
'an
accident beyond the conirol' of the defen-dant, No doubt it was beyond
his control but was it an accident, I think not, because an accident is not the same as an occurrence, but is something that
happens out of the ordinary course of things. A fall of snow is one of the ordinary operations of nature, and is an incident
rather than an accident, and therefore, without going into the rule that the general
words are to be restricted to the same
genus
as the specific words which precede them, I think this natural occuffence did not come within the terms of the exception
in the charter-party'.
67( 19s3)
l WLR 280
68Hal sbury' s
l aws of Engl and, Vol ume 9. 3rd edi ti on p322, l ootnote 6: Benj ami n Sal e of Goods
--
page 663, footnote 39.
' 15
The court dgcided on two counts;
(i)
M'cNair J held69 that the words contained in the
clause
prevented the court frcm holding that any
enforceable contract was made. He held that the
words
'in
the force majeure clause' made the
sentence so vague and uncertain to be capable of
any precise meaning.To
(ii) In the second
place McNair J71 considered that the
word
'condition'
in force majeure conditions means
'stipulations'
or
'clauses'
and not
'contingencies'
or
'circumstances'.
Therefore, as there was in the trade a vadety of'force
maieure conditions', and therefore fell within the line
of iuthorities of su ch cases as Bishop and Boxter Limited v
Anglo Eastem Trading and Industrial Company Limited12,
where an agreement
'subject
to warplause' was held by the
Court of Appeal to be not a completed agreement as the
war clause took many forms, and as there was no evidence
that the parties had any particular form of clause in mind,
there was no consensus ad idem and therefore no completed
confiact. 1a
It is interesting to note however, that McNair J
-
considered
that had the word
'conditions'
meant eitler
'contingencies'
or
'circumstances'
that the words/phrase may not have been
too vague to be of contraciual effect. Nor did McNair J
accept that the further submission by the defendants that
the phruse was too vague in the sense that it did not state
the legal consequences which would follow on proof of
force majeure, ie whether there should be cancellation or
dissolution.
Thus, it appears from this
judgement that the following
three clauses are too vague, and therefore, not binding;
Subj ect to force maj eure condi ti ons;
Subject to force majeure stipulations;
Subject to force majeure clauses;
unless those conditions, stipulations ol clauses can be
ascertained, because as McNair J states;?4
'.
. , , no consensus ad idem will be held to exist where
there still remains to be negotiated and agreed the exact
form of the clauses or conditions refered to by the
parties'.
However, the following clauses are not too vague and are
therefore binding;
Subject to force majeure contingencies;
Subject to force majeure circumstances; and in addition
McNair J statesTsl
'I
am quite satisfied that an agreement for sale which
was otherwise
precise and contained the phrase
'subject
to force majeure' would be a valid and enforceable
contract'.
Thi s begs the questi on. therefore. of *re defi ni ti on of force
majeure,
As discussed above?6
,
there is no legally acceptable
definition of force majeure. Therefore, if a clause
'subject
to force majeure' is incorporated into a contract, then
unless this is defined therein, or unless the circumstance in
which force majeure arises is stipulated, then parties do not
know what the clause intends exactly to cover;albeit they
have a
general knowledge perhaps from decided cases and
the possible intention from the particular contract.
Does this mean, therefore, that unless there is an acceptable
definition of force majeure then there will be no consensus
ad idem between the parties?
It is submitted tlat this is too general a mealing to derive
from the decision in this case, and that this must be put
into the context of the case.
The overriding factor in this case is that there were several
force majeure
'conditions'
in use in the trade at the time of
the contract. The fact that this contract did not stipulate or
imply which of these conditions was to be included meant
that the whole of the contract was too vague because there
was no consensus ad idem.
Again, it can be seen that the interpretation of the force
majeure clause falls back onto the context in which it is
wdtten. The danger of interpretation lies where it is removed
from tlis context,TT
6e( 19s3) 1WLR 3 283
7OG.
Scsmmell and Nephew Limited v Ouston.
(1941) AC 241. McNair J in order to support his decision quoted this case"at
p255.
'In
order to constitute a valid contract the parties must so express themselves that their meaning can be determined
with a reasonable degree of certainty'.
71 Ibi d p2 83
72n944\ KB t2
73(19s3) 1 WRL 283 p285.
74(19s3) 1 WLR 283 p284
rsl bi d p285
't6Thomas
Borthwick
(Glaaow) Ltd. v Fauvre snd Fairclough Ltd- (1968) 1 Lloyds Rep 16 p28. Per Donaldson J
??This
case can be contrasted with Nicalene Limited v Simmonds,
(1953) 1 AER 822; where there was a contract between
the seller and the buyer. The buyer in a ltter offered to buy specific goods from the seller..The seller replied in writing;
'As
you have made the order direct to me, I am unable to confirm on my usual printed form which would have the usual force
majeure and war clauses, tlut I assume that we are in agreement that the usual conditions of acceptance apply'.
It was held by Denning L J; at page 826;
'in
the case bifore the court there was nothing
yet to be agreed. There was nothing
letl to furthei negotiate. The parties merely agreed that
'the
usual conditions of acceptance apply'. That clause was so vague
and uncertain as io be incapable of any precise meaning. It is clearly severable from the rest of the contract, and can be
rejected without impairing the sense of reasonableness of the contract as a whole, and it should be so rejected'.
Tire difficulty, therJfore, which arises between the two cases, is when will a'vague' clause be severable from the main contract,
and when will such a term make the contract void for uncertainty.
This is a question outside the scope of this paper, and one which the courts must answer faced v/ith individual cases'
16
(c)
Self inducement
The courts have firr y held that any self-induced act,
omission or default on the part of the party seeking to be
excused will most certainly not fall into those eyents
covered by force majeure.?8
DEFINITION OF FORCE MAJEURE FOR CLAUSE 23(a)
OF THE JCT STANDARD FORM OF CONTRACT
No exhaustive definition can be given to the concept of
force majeure as it differs, depending on the facts of
individual cases.
The statement of Lord Denning in Stelmson, Jordan and
Hsrrison Limited v McDonald and Evan s79 regarding the
definition of a contract of service in employment law
could usefully apply to the definition of force majeure;
'Was
the contract a contract of service within the
meaning which an ordinary person would give under
the words . . . . it is alrnost impossible to give a precise
defi ni ti on of the di sri ncti on. l t i s often easy to recogni se
a contract of sewi ce when you see i r but di ffi cul t tJ
say wherein the difference lies'.
It is easier to identi$/ a cfcumstance falling within the
meaning of force majeure than to define it.
Unfortunately, the term force majeure has not received
judical
interpretation in a case conceming a building
conIIact.
Therefore, the other judgements
in commercial cases must
be used to provide an acceptable definition. This is best
done by means of a check list, as follows;
(a) The circumstances falling within the concept must be
independent of the will of the contracting parties;
(
Lebeaupin v Oispin)8O
(b)
The circumstances must be outside the control of the
party relying on the force majeure clause;' (Hong
Guan & Co. Ltcl. v R. Jumabhoy and Sons LimitedSl
the Co ncacloroS2)
(c) The circumstances will not include those which are
common or can be expected to occur in industry
(Mqtsoukh
v t iestman )83.
(d)
The ci rcumsl ances
wi i l nor i ncl ude ftrose whi ch the
contncting parties
are aware or should be aware at
the time of making the conl1lact, (Iohn
Batt and Co.
( London
)
Limited v Brooker, Dore and Comryn1t
)s4 ,
unless the intention by the parties
at the time of
contracting was that these should be includedl
(ReardotSmith
Line v Minister of Agiculture, Farms
and Fisheries)85
(e) Circumstances
which are self-induced by the party
relying on the clause will not amount to forci majeure,
.^
(Simons
v NortonS6, Lebaupin v Oispin)B'l
(0 The circumstances
which are claimed io constitute
force majeure must make the contract impossible.
and not merel y more di ffi cul t or more expensi ve i o
catry out (llalton
v British Italian Trading Co.8B,
.
Hackney Borough Council v Dore
)89
G)
The party
relying on the force maieure clause must do
al l rhat i s reasonabl y possi bl e
to pi evenr
rhe del ay
ftom occwring; (Nugent
v Smith)90
Having established
the geneml
criteria which must exist to
prove force majeure under clause 23(a), it is necessary to
examine those specific circumstances
which do, or wlich
do not. fal l i nto the defi ni ti on i n the cl ause.
Cl ause 23 i ncl udes other grounds
for whi ch ai r extensi on of
time would be granted
by the architect, which if thev were
nor separatel y stated may fal l under the cj ause 23{ai sub-
clause. These are:
(t
Clause 23(b) exceptionally
inclement
weather;
(Matsoukis
v biestmqn;83
Dixon v Metropolitan
Board of l4orks;91 Blyth v Birmingham
Warcrworks
Co.e2 Briddon v Grcat North Railway Companyg3l
(ii)
Clause 23(c)
-
loss or damage occasioned by any oi
the contingencies refeued to in clause 20(A), (ti)
or
. -
(C); (
Keighley's ssss94
;
l{ugent v
gmith)90
(iii)
Clause 23 (d)
-
civil commotion. local combination
of workmen, strike or lockout, etci (Lebequpin
v
Crispin9S
;
Hackney Borough Council v Dori)89.
?8Ia
the^nineteenth century case-of Sln mons v Norton, (1831)
7 Bing 640 at page 649; Tindall C J Speaking of vis nEjor;
'It
is sufficient, however, to say that the general issue applies only to iases wherJ the act complained of is not the act of
the party;if it be the act of the party, he must admit and
justify
it on record . . . .'
In Lebeaupin v Oispin per McCatdie J (1920)
2I(B 714 & 721;' Aman cannot rely on his own act, or negligence or omission
or default as force majeure'.
This was also held in the case of Ne\e Zealtnd Shipping v Societe des Arteliers, (1919) AClat 6;per Lord Finlay L C.
.it
is a
.pdnciple
of law that no one in such a case takes advantage of the existence of a state of things which he himseif produced . . .,
And per Lord Atkinson, at page 9;
'The
application to contracts such as these of the principie
that a man shall not be
pemitted
to take advantage ofhis own wrong, thus necessarily leaves to the blameless puri un option *frether he will
ar
will not insist on the stipulation that the contract shall be voii on the happening of the named eu'"nt. io o"priv" t im of that
option would be but to effectuate the purpose
of the blameable party'.
The same approach to self inducement has been followed by theiouits regarding the doctrine of frustration.
rtr Maitime National Fish Limited v ocean rluwlers Limitia,lozsl lciz+;Iird wright said;
.The
essence of
.frustration'
is that it should not be due to the act or election of the oartv'.
Therefore, it can be seen that the common law approach is t-he same as tiat adopted in force majeure cases, which is summed
up in Goirond's definition, (French
commercial law 2nd edition, p854)
where ie states that irrl ,"r- i"r". r"",.ure is a term
used with reference to all circumstances . . . .
,not
within his (man,i) power to control'.
7e.(1953)
1 TLR 101
8s
(1959)
| I_{' yds 223
80 (1920)
2K8716
Bs
es22)
| KB 431
81 (1960)
AC 684
e0 (1876i
I KB s3l
82 ( 1916) 2
AC r 99 er ( 1881)
7
QBD4I 8
83 ( 1915)
1 KB 681
e2
( 1856) l l Exch 781
84 (1942)
Ll oyds Li st LR Vol . 72. 149
e3 (1858)
28 LJE' 5l
8s (1962)
1
QB
42
86 (1931) 7 Bi ns 640
e4 (1609)
10 Co Rep 139
87 (1920)
2KB 716
1 7
(iv) Clause 23
(i -by
the contractor's inability to secure
such labour, goods and/or materials as are essential to
carry out the work s. (Matsoukis v fuiestrnenS3)
These circumstances will not constitute force majeure under
clause 23(a). Thus, if one of the above sub-clauses was
deleted from the contract
(ie
the contract specifically
allows for the deletion of all or part of sub-clause 23
O;
then the intention of the contracting
parties must be that
these circumstances shall not give rise to an extension of
ti me.
Therefore, if one or more of the sub-clauses is struck out,
this will not constitute a reason by force majeure under
clause 23(a).
This is because of the application of the ejusdem generis rule
as discussed previously.
As stated btl-ord Parmoor in the Concadoro96;
'I
take it that a force majeure Clause should be construed
in each case with a close attention to the words which
precede or follow it, and with a due regard to the nature
and
general terms of the contmct".
And in Mottram Consultants v Benard Sunley and Sons
Limited per *t4 6ros9?; (a case not concerned with the
force majeure provisions)
'Where
the parties use a pdnted form and delete pafis of
it one can, in my opinion pay regard to what has been
deleted as part of the surrounding circumstances in the
light ofwhich one must construe what they have chosen
to leave in'.
Therefore as stated above, by striking out one of the sub-
clauses from the contract, it must be the intention of the
contracting
parties that the circumstances included under
the sub-clause shall not constitute a ground for an extension
of time under clause 23, and will not, therefore, fall under
force majeure sub-clause 23(a).
This was the guidance given by the Royal Institution of
Chartered Surveyors
(Quantity Surveyors Practice and
Management Committee) where delays were caused to
building contracts by the 1973174 erctgy crisis. Statutory
restrictions on the use of fuel and power causing delays or
shortages to supplies of goods and materials in contracts
where clause 23O
(ii) was deleted.98
Finally, sub-clause 23(d) covers delays by civil commotion,
strikes etc., in specific circumstances. Situations may well
arise where a delay may be caused by civil commotion,
strikes etc., which do not fall into the specific
clrcumstances.
Therefore, will these grounds fall under clause 23(a) force
majeure?
There are t]vo possible approaches to th.is question;
Firstly, it may be argued that the force majeure clause 23(a)
is a''fall back' clause. That is to say that clause 23(a) is to
be read together with, and not independently of the
following sub-clauses.
These sub-clauses, therefore, would be by example of
occurrences covered by the clause 23(a), although standing
in their own right when used as a rcason for granting
extensions of time.
Therefore, if an occurrence does not fall directly under
clause 23(b), (c), (d) or
O,
then it is not necessadly
precluded from reverting to clause 23(a).
h'or example, strikes which do not fall under caluse 23(d)
may fall within the meaning of force majeure under clause
23(a). This is supported by Mastrandrea.99
Secondly, it can be argued that the intention of the parties
at the time of contracting must have been only to have
included delays due to the strikes stated in clause 23(d),
otherwise clause 23(d) would not have been included, and
strikes, etc., would have fal1en under clause 23(a)
-
force
mai eure.
Thii was implied, albeit obiter dicta by Bailhache J in
Matsoukis t-Priestmar100.
However, in that same case, the
court held that the delay was not the direct result of the
coal stdke, but that the strike affected the production of
materials by a supplier of the defendant, which delayed
the defendant in completing
the ship bing constructed
pdor
to the
plaintiffs shiP.
i hi s therefoi e,
generatl y di sl ocated l he defendanr' s busi ness'
which was due indirectly to the coal stdke, and was
therefore covered by the force majeure clause' Thus, it
deDends Durel v
on the [acts ofthe case whel her sl ri kes.
ci vi l commoti on, etc., not covered by cl ause 23(d) wi l l fal l
under 23(a).
There appear, therefore, to be very few circumstances
covered by clause 23(a). Such would include, war,
sovernment/administrative
intervention, Act of Parliament
iccident or casualty
(eg epidemics) and
possibly strikes,
lockouts. etc., not directly affecting the works'
However, as l-ord Denning said above when referring to
contracts of se ice, it is easier to recognise a circumstance
of force majeure when
you see it than to give a preclse
definition.
One final requirement
of clause 23 is thaU
'Upon
it 6ecoming reasonably apparent that the progress
ofihe works is deiayed, the contractor shal forthwith
give written notice of the cause of the delay to the
ar c hi t ec t . . . . '
Therefore, if the contractor
fails to comply with this time
limit, his dght to an extension of time will be lost' This was
iiifri"a'n rno*as Borthwick v Fauvte and Faircloughlor
where clause 19 provided that notice of the likely delay due
to
'force
majeuri' must be given by the shippers to their
^ -
buyers within 7 days of the occufience, or not less than 21
days before the commencement
of the contract
period,
whi chever was the l ater.
This procedure was not followed by the shipper, and had
the delay been held to be a circumstance covered by force
maieure. then the seller would have been prevented from
relying on clause 19 for failure to comply with this
requlremenr.
qs ( 1920)
2 KB 716
e6
(1916) 2 AC r99
e7
(L974)
2BI-R3
gSEnergy
Crisis. Statutory restrictions on the use of fuel and power. Chartered Surveyor 1914 April, p267
I Mastrandrea, F. An example
-
force majeure' QS
Weekly 1977 September'
p4'
100 (1915) I KB 681. pp686-68?.
' Was
the detenti on of the berths i n those ci rcumstances a case of force maj eure. If i t had
been the direct result of the coal strike there woulC have been great difficulty in saying that the case came within the
exceptions clause, seeing that certain strikes are there particularly mentioned. It would have been difficult to hold that
another strike operating directly upon this ship ought to be added to the specific strikes mentioned in this clause'.
101 (1968) 1 Ll oyds Rep 16.
18
APPENDIX I
EXTRACT FROM THE GENERAL CONTRACT OF THE GRAIN AND FEED TRADE ASSOCIATION
PROHIBITION-I0 case of
prohibition of export, blockade or hostilities or in case of any executive or legislative act done by o! on behalf of the
governmetrt
of the country of origin or of the terdtory where the port or porfs of shipment named herein is/are situat, restricting export, wbether
partially
or othrwise, any such restristion shall be deeried by both
parties
to apply to this conuact and to the extent of such total o!
paitial
restrictioD
to
prevent
fulfilmeat whether by shipment or by aoy other meaqs whatsoever aod !o that extent this coDtract or aDy uDfulflled
portion thereofshall be
cancelled. Sellers shall advisc Buyers without delay with the rasons therefor and, if requiled, Sellers must produce proof
to
justify
the carcellatioD.
FORCE MAJEURE, STRIKES ETc.-Sellers shall not be rcsponsible for dclay in $hipmeDt of the goods or any part thercof occasioned by any Acl
of God, strike, lockout, riot or civil commotion, combination of workmcn, breakdown of machiftf,y, 6rc or any crusc comprehended in the terrn'force
majeule'. If delay in shipment is likely to occur for any of the above rcasoDs, Shippcrs shall
giv notic to their Buyers by telegram, telex or teleprinter
or by similar advice withio 7 coDscltive days of the o@urrencc, or not lcss than 2l coEecutive days beforc the coomencemcnt of the contract period,
whichever is late!. The notice shall state the tcasod(s) for the anticipated delay, If after giviDS such notice an cxtcotion to the shipping
period is
.cquircd, then Sh.ippers shall
givc
furthcr troticr not late! than 2 days aftcr thc last day of the coDtract
pcriod of shipmcDt stating the port or ports of
loading from which the
goods were intended to be shippd, and shipments efectcd after the coutract
period
shall bc Iimited to the port or ports so
nominated. If shipment be delayed for more thaIl oaa caleDdar month, Buyers shall have the option of caacdliDg the dlayed portion of the contract,
such option to be exercised by Buyers
giving
notice to be re.eivcd by Sellers Dot later than the 6rst busincss day after the additional calendar month.
If
&yers
do not exercisc this option, such delayed
portion
shall bc automatically extcDded for a further
period
of ooe month. If shipment under this
cl{use be
prevented
during the further one month's extcdsion, the contract shall be considered void. Buye.s shall have no claim against Sllers for delay
or non-shipment under this clause, provided that Sellers shall havc supplied to Buyers, if required, satigfactory evidcnce
justifyirg
the delay or nod-
fulfilmeot.
NOTICES-Any Notics received aftcr 1600 hours o! a business day $hall b deemcd to have ben receivcd on the businesr day following. A Notice
to the Broker or Agent shall bc demcd a Notice uoder this CoDtract. All Notices givn
undcr this Cont.acl shall be givcn by letter or by tele$am or
by telex or by other method of rapid writteq communication. Itr
qasc
of.sales all Notics shall be passed on without dlay by Buyers to their respG
tive Sellers or vice versa-
NON-BUSINESS DAYs-Saturdays, Sundays and thc ofncially rerognisd and/or lcgal holidays of the rqlpcctive countries and aDy days which Thc
Crain & Feed Trade Association Ltd. may delaE a! NoD-Busin$ Days for spcifc
purposes,
shall be non-busioess days, Should the time limit for
doing any act o.
giviog
any notice expi.c oo a Non-Busitrcss Day, the time so limited shall be exteoded until the first busiress day thereafter.
The pedod of shipment shall not b affected by this claus..
DEFAULT-In default of fumlment of contract by cithcr party, the other, al his discretion, shall, after gividg notice by letter, telegxam, or telex, have
the right to sell or purchase as the case may bc, agiainst thc defaulter aqd the defaulter shall rnake good the loss, if ady, oo such
purchase or sale on
dmaDd. If the
party
liable to pay be dissatisfed with thc
p.ice
of such sale or purchase or if the above right is Dot exercised aDd damages cannot be
mutually agreed, any damages, payabl. by the party in default shall be scttled by arbitlation. In the event of default by Sellers entitling Buyers to
damages, such damages shall be based upon thc actual or estimated value of the goods
on date of default, to be fixed by arbitration unless mutually
agreed, and nothing contained in or implicd uDder this contract shall entitle Buyers to racover any damages io respect of loss of profit upon any Sub
Contracts made by themslves or otheN unless the Arbitrators or Board of Appeal, haviog regard to aBy special circumstances, shall io their sole
and absolute disctetior award such damages. In the event of default in shipment or delivery, damages, if any, shall be computed upo[ lhe mean
contract
quantity.
Default may be declared by Seller at any timc after expiry ofthe contruct period, and lhe default date shall then be the first business day after the date
of Seller's advice to his Buyer. If default has not already ben declared thed notwithstandidg the provisions
stated in sub-clause (b) of the Appropriation
Clause, if a notice of appropriation is not passed by the 10th consecutive day after the last day for approp atiod laid down in the cont.act, the Seller
shall bc dcemed to bc in default and the default date shall theD be the 6rst business day thergafte!.
CIRCLE-Where a Seller repurchases from his Buyr or frorn any subsequent Buyer the same goods or part thereof, a circle shall be considered
to exist as regards the particular goods so repurchased, and the provisions of the Default Clause shall not apply. (For the purpose of this Clause
the same goods shall mean goods of the same descdption, from the same couDtry of origin, of the safte
quality, and, where applicable, of the same
analysis warratrty, for shipmedt to the same
port(s) of destination duriDg the same
pedod
of shipme[t), Subject to the terms of the Prohibition
Clause in the contract, if
goods are not appropriated, or, having beeD appropdated documents are not presented, invoices based on the mean
cont.act qualtity shall be sttled betweea each Buyer aod his Sller in the circle by paymeDt by each Buyer to his Seller of the excess of the SlleG
invoice amount of the lowest invoice amount in the circle. Payment shall be due not later than 15 consecutive days alter the last day for
appropiatio!, or, should the circle not be ascertained before the eipiry of this time, then payment
shall t'e due not tater ihan 15 consecutive days
after the cilcle is ascertained. All Sellers and Buyers shall give every assistance to ascrtain the circle and when a circle shall have been ascertained
in accordance witb this Clause same shall be biDding on all parties
to the circle. As between Buyers and Selle$ in the circle, the non-
presentation of documents by each Slle! to his Buyer shall not be considercd a breach of contract. Should any
party
in the circle colnmit any
act comprehended id the Insolvency Clause of the contract, p.ior to the date of paymcnt being due as stated above the invoice amount for the
goods
calculated at the closing out price as provided for in the Insolvency Clause, shall be taken as the basis for settlement inslead of ihe lowest invoic
amount in the cifcle, and in this event, each Buyer shall make paymeDt to his Seller, or each Seller shall make
payment
to his Buyer, of the
difreredce betwen the closing out
pdce
aod his contract price
as the case rnay be.
INSOLVENCY-If before the fulfilment of this contract, itbe. party shall suspeDd payincDt!, commit an act of bankruptcy, lotify any of his c.editoN
that he is unable t6 meet debts or that he has suspended ot that he is about to suspend
payment
of his debts, coDvene, call or hold a meetiog of credi-
tors, convene, call or hold a meeting to go into liquidation
(other
than for reconstruction or amalgarnation) or shall apply for an omcial moratorium,
have a petition prescntcd for winding up, or shall have a Receive. appointed, lhe conract shall forthwith be closed, either at the market price
then
current for similar
gooda, or at the option of the other party,
at a p
c to be ascertained by re-purchase or re-sale, and the difrerence btween the
contract pric. and the closing price
shall be the arnount payable
or receivable under this codtract.
DOMrcILE-Buyers and Sellers agree that, for the
purpos
of procedings either legal or by arbitration, this Cotrtract shall be deemed to have been
made in England, and to be
performed
there, any correspondence in reference to the ofer, th acceptance, the
plac
of
payment,
o. otherwise notwith-
standing, and the Coufls of England or arbitralors appointed io EtrglaDd, as the case may b, shall, except for the purpose of enforcing any award
made in pusuance of thc arbitration clause hereoi have exclusive
jurisdiction
over all disputes which may arise udder lhis CoDtract. Such disputes
shall be settld according to the law ofEngland, whatever the domicile, resideoce or place of business ofthe
pa.lies
to this Contract may be or become.
Any party
to this Contract residing or carrying on business elswhere than in Engladd or Wales, shall for the
purpose
of
procediogs
at law or in
a.bitratiod be considered as ordinarily resideot o. carrying on business at the offces of Th Crain and Fecd Trade Assodiation Limited, aDd if in
scotland, he shall be held to havc prorogated jursidiction
against himself to the English Courts; or if in lreland to have submitted to the
jurisdiction
and to be bound by the decGion of the English Courts. The service of
proccedings
upon any such parry by leaviDg rhe sanre ai $e omce of The
Crain aod Feed Trade Association Limited, together with the
posting
of a copy of such
proceedings to his address abroad, or in Scotland or in
keland, shall be deemed good
service, any rule of law or equity to thc contrary Dotwithstaoding.
ARBITRATION-
cognrsant.
(b)
Neither party hereto, nor aoy persons claiming under either of them, shall briog a|ly action or other legal proceedings against the other of them
iD rcspect of any such dispute until such dispute shall firsl have been heard and determined b) rhe arbitrators, umpire or Board of Appeal, as the case
may be, in accordanc with th. Arbitration Rules and it is expressly agled aod de.laled that rhe obtainiDg of ao award from the a.bitlators, umpire or
Board of Appeal, as the cas may be, shall b a condition p.ecedent
to the right of either party hereto or of any persoa claiming uDder either of
them to bring any actiotr or othcr legal prLceedings against tbe other of them in tespect of any such dispute.
(a)
ADy dispute arising out ofor under this Contrad shall be settled by arbitratioo in London in accordanc. with the Arbitratioo Rules No, 125.of
The Grain and Feed Trade Associatio! Limited, such Rules forming pan of this Contract aod of which both
parties
hereto shall be deamed to be
ULIS CLAUSE-ThC Unifom l-aw on Sales and the Uniform Law on Formatio.l to which effect is givcu
by the Uniform Laws oD Intemational
Sales Act 1967, shall not apply to this contract.
1 9
EXTRACT FROM THE STANDARD TRADE CUSTOMS ISSUED BY THE BRITTSH| PAPER MILLS
STANDARD TRADE CUSTOMS ISSUED BY THE BRITISH
PA?ER MILLS
GENERAL
_
APPLYING TO ALL PAPER AND BOARD
(Hereinafter Referred to as Paper)
FORCE MAJEURE
(a) Dehyed Deliveries
In the event of del i very by the Sel l er or acceptanoe by the
Buyer bei ng whol l y or partl y prevented or i nterfered wi th
by act of God, hosti l i ti es, threat of war, ri ot, stri ke, l ock out,
ci vi l commol i on, fi re, drought, fl ood, restri cti on by
Government or other competent ruthori ty, shortfal l i n
anti ci pated suppl i es oi raw materi nl , or by any of the
fol l owi ng conti ngenci es beyond the control of the party
affected: i nterrupti on of transport, destrucl i on or damage
of premi ses, pl ant or machi nery, or l ny other causes whetl ]er
of si mi l ar character or not, beyond the control of the party
affected i ncl udi ng, i n the oase of the Buyer, cruses uffecti ng
the Buyer' s customer, the fol l owi ng provi si ons shal l huve
effect:
(1) The party affected shal l gi ve to thc other party
i mmedi ate noti ce of causc preven{i ng or i nterferi ng
wi th del i very or ucceptxnce xnd the cxl ent l o whi cl l
del i very or acceptarrce i s prevented or i nterl -ered wi tl i
and (i f possi bl e) the probl bl e durr{i on of the caLrse
of preventi on or i ntert-erence.
(2) Duri ng the conti nul nce oI tl re cause of preventi on or
i nterference, del i very ol tl re urrl ul i l i l ed porti on o1'
the contract shal l b9 suspc| dcd or, i tr tl l e crse ol x
parti al preventi on or i nterference, feduoed unl i l l he
cause shal l have ceased 1() operl te.
APPENDIX II
(3) Immediately the cause of the prevention or interferenca
has ceased to operate, the party concerned shall give
noti ce thereof to the other party, and as soon as
practicable thereafter delivery shall be resumed in
accordance wi th the terms of the contract.
(4) If a cause of preventi on or i nterference shal l conti nue
for more than one calendar month after the stipulated
date of del i very ei ther party may by noti ce i n wri ti ng
to the other cancel that porti on affected by the del ay.
(5) Goods due for del i very wi thi n one cal endar monl h or
i n the course of manufacture or i n tnnsi t at the ti me
ofany noti ce as aforesai d bei ng gi ven by the Buyer
must be accepted by the Buyer notwi thstandi ng such
noti ce, provi ded the Buyer has been advi sed by the
Sel l er of the i ntended maki ng date.
(b) lncreused Cbsts
In the event of i ncreases i n costs of producti on of paper and
boa| d cuused by act of God, hosti l i ti es, threat of war, ri ot,
stri ke or l ock-out, the Sel l er shal l noti fy the Buyer of such
i ncreuse i n tl i e cost i n respect of any unfi l l ed porti on of a
contract and the Buyer shal l have the opti ol of agreei ng to
pay the extra cost or cl ncel l i ng the remai nder of the
contract. Any such noti fi cati on shal l be sent i n wri ti ng and
unl ess the Buyer wi thi n seven worki ng days of recei vi ng
the Sel l er' s noti l -i 0ati on of i rl creases cost shal l by noti ce i n
wri ti ng to the Sel l er refuse to pay such i ncrersed cost tl l e
Buyer shal l be deemed to have el ected to i rccept the
reni Li trder of the contraot rnd i t shal l be e\ecuted
rccordi ngl y.
20
A?PENDIX III
EXTRACT FROM THE CONTRAqT AND CONTRACT RULES OF TIIE SUGAR ASSOCIATION OF LONDON
FORCE MAJEURE.
C.I.F. Free Out & C. & F. Free Out Contralts.
120. Wherc thc Contract spcifieS thc placc
of origin of
*fflf#
thc sugar and, in thc casc of any othcr contract, oncc the
titDf,.
Seller has dcclared an origin, thc following Rule shall apply
to the origin so specifid or dcclarcd.
Sbould Government intcrvention, waf, striks, rebel.
lion, insurrection, political
or labour disturbances, civil com-
motion, fire, sfess of weather, act of God or any cause ol
Force Majeure (whether
or not of like kind to those beforc
mentioned) byond the Scllcr's control prcvent directly or
indirecdy within thc shipping period specified in rhe contract
(a)
the supply to or delivery at shipping port in whole
or in part of the sugar allocated or to be allocated
by the Seller against the contract
of
(b)
thc vcsscls dcclarcd or to bc declarcd fron load.
ffif
ing tbc suglr and thc Sellcr or his sgcot bc
rttD.c- le6t
unablc to cngagc altcmativc similar frcight spacc
to cnablc him to eftcct shipmcnt within thc con-
tract pcriod thc Seller shall immcdiaiely sdvisc
thc Buycr (by
crblc or t lcpdnter if abroad) of
such fact and thc quantity
so sficctcd and thc
shipping pcriod shrll bc cxtendcd by thirty days.
Il thc Scllcr is prcvcntcd
fmm advising immcdi-
atcly through circumstancB bcyond his conuol
hc shall notify the Buycr &r soon as possible.
If
thc shipmcni is still prcveoted
b,y thc cod of thc
cxtndcd pcriod,
thc Buyer shall havc thc option
of cancelling thc contract for thc affcctcd
quartity
or of taking dclivcry at thc contrrct
pricc without claiming damagG as soon as thc
sugar can bc shippcd. Thc Buycr's dccision shall
bc notified to thc Sbller
(by
cablc or tclcprintcr il
abroad) promptly rftcr rcccipt of the Scllcr's
advicc. Should thc Buycr clcct not to canccl thc
contract but shipmcnt of thc sugar in wholc or
in part still remain impo&sible sirty days aftcr
thc last shipping datc providcd
for by thc con.
tract, thc contract shall bc void for such quantity
without penalty payablc
or rcccivablc-
.
In all c.s6 whcrc the controct provides
for
dclivcry by instalments, each instalment shall be
deemcd a scparatc contract.
Thc party to a contract claiming Forcc Majeurc
shall, il requcstcd by thc othcr party
submit such
cvidcncc as may bc nccassary to provc
satisfac.
torily thc cxistcnca of any causc of prcvention
or delay claimcd undcr this Rulc.
r