Translation: Force Majeure = Force Majeure (an overpowering event that prevents performance)
Simplified Definition: Force majeure is an exceptional circumstance that cannot be foreseen or prevented, and makes performance of an obligation impossible at the scheduled time, such as major natural disasters, severe shipping disruptions, or sovereign decisions that prevent performance.
What does it mean for you?

  • If you are a customer: services/deliveries may be delayed without penalties on the other party during the event period.
  • If you are a company: the clause may protect you from huge damages if it is proven that the cause is beyond your control and you notified the other party quickly.
  • In markets: announcing force majeure may raise prices because the market prices "uncertainty" before it prices "shortage of quantity."

Frequently Asked Question: Does force majeure mean a company can halt a contract whenever it wants?
Answer: No. The event must be unforeseen and beyond control and make performance impossible, and usually requires formal notice, evidence, and an effort to minimize harm.