Reporting of non-force majeure events: Overview, definition, and example
What is reporting of non-force majeure events?
Reporting of non-force majeure events refers to the requirement in contracts for parties to inform each other about events or circumstances that disrupt the performance of the contract but are not related to force majeure. Force majeure typically covers unforeseeable events like natural disasters, wars, or pandemics, but non-force majeure events can be any other unexpected or unusual circumstances, such as financial difficulties, supply chain issues, or regulatory changes that impact the ability to meet contractual obligations.
Why is reporting of non-force majeure events important?
This is important because it ensures transparency and allows both parties to address and mitigate issues that could affect the contract's performance. By reporting non-force majeure events, both sides can collaborate on solutions, such as adjusting timelines or renegotiating terms, and avoid disputes. Clear communication about these events can help prevent misunderstandings and reduce risks for both parties involved.
Understanding reporting of non-force majeure events through an example
Imagine a retailer has a contract with a supplier for a set amount of products to be delivered by a specific date. If the supplier faces unexpected delays due to a local transportation strike (a non-force majeure event), they must report this event to the retailer as soon as possible. The retailer can then decide whether to extend the deadline or take other actions, such as finding alternative sources for the products.
In another example, a software development company has a contract with a client to deliver a customized software solution. If the company faces a sudden change in regulations affecting its development process, the company must report this non-force majeure event to the client. The client can then evaluate the impact on the project and discuss necessary adjustments to the delivery timeline or scope.
An example of a reporting of non-force majeure events clause
Here’s how a clause related to reporting non-force majeure events might look in a contract:
“Each Party shall promptly notify the other Party in writing of any non-force majeure event that could impact the performance of this Agreement, including but not limited to delays, financial issues, or regulatory changes, and shall work with the other Party to mitigate such impacts.”
Conclusion
Reporting of non-force majeure events is essential for maintaining effective communication and minimizing disruptions in business operations. By ensuring that both parties are aware of any issues that could affect the contract’s performance, they can take timely action to resolve problems and avoid further complications. Including a clause for reporting non-force majeure events helps maintain trust and clarity between all parties involved in the contract.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.