Force Majeure Clause

The force majeure clause is a common exemption clause in foreign trade contracts. It means that when an objective situation that could not be foreseen, avoided, or overcome at the time of contract conclusion occurs (such as natural disasters, war, government bans, strikes, epidemics, etc.), causing one party to be unable to perform or to delay performance of its contractual obligations, that party may, under certain conditions, be exempted from liability for breach of contract. Its use scenarios include delayed delivery of goods, production interruption, and blocked transportation. Notes: 1) The clause should clearly define the definition, scope, and burden of proof of force majeure; 2) The affected party must promptly notify the other party and provide valid evidence (such as a chamber of commerce certificate); 3) Force majeure is not an automatic exemption; it is necessary to prove a direct causal relationship between the event and the inability to perform; 4) It should be agreed that if force majeure continues beyond a certain period, both parties have the right to terminate the contract. Difference from other terms: Force majeure is different from 'hardship,' which refers to difficulty in performance but not impossibility, and usually requires renegotiation of the contract; it is also different from an 'exemption clause,' which has a broader scope and may cover events other than force majeure.