May the Force (Majeure) be with you: Contracting in an uncertain world
Since COVID-19, everyone became aware of this provision tucked safely into the back of their contract. It actually is important! And for a minute, it made every commercial landlord in the Chicago loop tremble in fear.
For an Illinois contract lawyer who has had to explain what it means many times, it’s nice that we’ve all arrived at a better understanding of my work. And just so we are clear, let’s confirm that everyone understands force majeure clauses work in Illinois since - we wouldn’t want any misinformation out there.
According to google, it originated with French law but why it retained the French name in a place that only speaks English and a profession that only cares for Latin, I don’t know. I do know that it translates to something like superior force which is why the ominous Act of God is always mentioned.
As a legal concept, force majeure exists to excuse performance in the event of unforeseeable events. So if you were going to sell a boat that is destroyed by the wrath of a vengeful god, then you can invoke the force majeure protections in your well-written contract to ensure that you aren’t required to sell a boat that no longer exists.
In the case mentioned above, it can excuse performance permanently. More often, it only delays performance. So if you are unable to produce widgets while there is a plague of locusts that prevents workers from reporting to the widget factory, then you are excused from contracts requiring widgets until the locust plague ends. Once the workforce is able to resume producing locust-free widgets, your contractual obligations will resume (unless otherwise agreed upon in a clear and well written contract).
What it doesn’t do is allow you to revise terms of performance unilaterally and it definitely doesn’t allow you to increase fees to account for unexpected costs or rampant inflation. If you want the ability to raise fees based on cost increases in your Illinois based agreements, then you need to specifically state that and include a method for doing so.
It also may not protect you at all - one issue of force majeure provisions that I see is that they are often not specific enough. As an example, I’ve reviewed one lease that had a lengthy paragraph about the possibility of fire damage, but nothing specific about any other possibility of damage or destruction of any other kind. What happens if the building is destroyed by a tornado that caused a small fire? Do you have still have to pay rent on the tornado damaged building? Are you only excused from paying rent from the fire damaged portion? Illinois Freelance Standards
Given the expansive nature of some of contract language, Illinois courts have generally been somewhat reluctant to read too far into these types of provisions. Importantly, they have typically been more eager to enforce the provisions where the language is specific over provisions that relied on broad categories (such as Act of God or events beyond a party’s reasonable control). If you are worried about natural disasters, then go ahead and say so, specifically naming the ones most common in your geographical area.
So my recommendation is to ensure that if you are a Chicago area business performing services or providing goods, think through likely scenarios that might interrupt your performance, then go ahead and list every possible interruption you can think of anyway. Sure, Illinois isn’t earthquake prone but who knows? Reach out for a free consultation
If you are buying goods or services in Illinois, then take a different tact and maybe limit the excuses to those that seem somewhat relevant. Also, consider notice provisions and whether you may need to terminate the agreement entirely if the provider delays performance for more than a set number of days. If all the widgets in Illinois are locust-plagued, perhaps Michigan or Indiana are a better option.
