Life is unpredictable. So what happens when unexpected events such as natural disasters or global crises strike and a contract becomes impossible to fulfill? BOAT takes a closer look at the meaning of legal clause "force majeure" , gives examples of force majeure events and explains how it can apply to superyachts...
What is force majeure?
Force majeure, meaning "superior force" in French, is a legal term that refers to unforeseeable and unavoidable events that prevent parties from fulfilling their contractual obligations. In the world of contracts, business and maritime law, it is a critical legal concept that protects the affected parties from liability. This legal principle is usually included as a clause in contracts and can relieve parties of their obligations without penalties when such events occur.
Events that commonly fall under force majeure include:
- Natural disasters such as hurricanes, earthquakes, floods, and wildfires.
- Human-caused disruptions including war, terrorism, civil unrest and labour strikes.
- Government actions such as sudden legal changes, embargoes or border closures.
- Health crises including pandemics and epidemics, as well as major supply chain failures or transportation disruptions.
How does force majeure affect superyachts?
Force majeure is particularly relevant in the superyacht industry, where unpredictable events – such as severe weather, war, legal changes or pandemics – can impact and disrupt operation, project construction, yacht charters, crew employment and agreements.
Project construction
For superyacht projects construction, shipbuilding contracts often include a force majeure provisions to protect shipyards and owners from delays caused by factors beyond their control such as supply chain disruptions, political instability and natural disasters affecting the shipyard. When invoked, the shipyard may receive an extension on deadlines without penalties and the owner may have options to renegotiate or exit the contract.
Yacht charters
In yacht charters, if an unforeseeable event disrupts a scheduled trip, the force majeure clause in the contract may excuse the yacht owner or charterer from their obligations, usually allowing for refunds, rescheduling or a reallocation of liability, depending on the contract terms. As an example, if a hurricane destroys a marina and prevents a charter from taking place, the owner may not be held responsible for cancelling, provided the force majeure clause explicitly includes natural disasters.
Crew employment
Force majeure also plays a role in crew employment contracts. If a pandemic prevents crewmembers from reaching the yacht, the owner might not be obligated to pay for the missed work period. Similarly, if geopolitical events force a yacht to change its cruising plans, the clause may allow for early contract terminations without financial penalties.
What are the legal frameworks governing force majeure?
Force majeure is not automatically applied in contracts; it must be explicitly included. How it is interpreted also depends on the contract’s governing law.
English law
Under English law (otherwise known as common law), there is no automatic application of force majeure. The contract must specifically contain a force majeure clause, and courts interpret it strictly and only the listed events are considered valid.
French law
Under French law (otherwise known as civil law), force majeure is automatically recognised under Article 1218 of the French Civil Code. An event qualifies as force majeure if it is "unforeseeable, unavoidable and prevents the fulfillment of obligations." Unlike in common law jurisdictions, parties in France may invoke force majeure even if no explicit clause is included in the contract.
American law
In the United States, force majeure also requires explicit inclusion in the contract. Some states, such as New York, interpret these clauses narrowly, while others, such as Louisiana (which follows civil law principles), allow for broader application. If no force majeure clause exists, U.S. courts may consider impossibility or impracticability doctrines to determine whether performance should be excused.