Where by reason: Overview, definition, and example
What does "where by reason" mean?
"Where by reason" is a legal phrase used in contracts and legal documents to introduce circumstances or conditions that lead to a specific outcome or obligation. It typically explains a cause-and-effect relationship, indicating that a particular situation has resulted in a legal consequence, exemption, or requirement. This phrase is often used in force majeure clauses, liability provisions, and statutory exemptions to clarify when certain rights or obligations arise.
For example, a contract may state that a party is excused from performance “where by reason of unforeseen government regulations, the obligation becomes impracticable.” This means that if new laws make it impossible to fulfill the contract, the affected party is not held liable.
Why is "where by reason" important?
The phrase "where by reason" is important because it provides clarity, specificity, and legal justification in contractual and statutory language. It helps define cause-and-effect scenarios, ensuring that obligations, exemptions, or legal rights are properly framed. By explicitly linking a circumstance to its consequence, this phrase reduces ambiguity and helps prevent disputes.
For businesses, using "where by reason" ensures that contracts clearly define conditions under which obligations may change, be excused, or enforced. For legal documents, it strengthens the reasoning behind exemptions, liability limits, or regulatory compliance.
Understanding "where by reason" through an example
Imagine a construction company that has agreed to complete a project within six months. However, due to severe weather conditions and flooding, work is delayed. The contract includes a force majeure clause stating: "The Contractor shall not be liable for delays where by reason of natural disasters, including floods or hurricanes, performance is rendered impossible."
This means the contractor is not at fault for missing the deadline because the delay resulted from circumstances beyond their control.
In another example, a supplier agreement includes a pricing adjustment clause: "Where by reason of significant fluctuations in raw material costs exceeding 20%, the Supplier may renegotiate the contract price."
This ensures that if material costs rise significantly, the supplier has the right to discuss price adjustments instead of absorbing the financial impact.
Example of a where by reason clause
Here's an example of a where by reason clause:
“The obligations of the Parties under this Agreement shall be suspended where by reason of any unforeseen regulatory changes, compliance with the terms herein becomes impossible or unlawful. In such cases, the affected Party shall provide notice and take reasonable steps to mitigate the impact.”
Conclusion
The phrase "where by reason" is a useful legal tool for establishing cause-and-effect relationships in contracts and legal documents. It clarifies obligations, exemptions, and conditions under which certain actions may be excused or required. Including a well-drafted "where by reason" clause ensures that contractual terms are fair, enforceable, and clearly linked to specific circumstances, reducing ambiguity and potential disputes.
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.