Strike Clause

A strike clause is a force majeure or exemption clause in international trade contracts, designed to exempt the affected party from liability for breach of contract when events such as strikes, work stoppages, or labor disputes prevent the seller from delivering goods on time or the buyer from taking delivery on time. This clause typically appears in commodity, long-term supply, or transportation contracts, especially in sectors vulnerable to strikes such as maritime shipping and port operations. Usage scenarios include: the seller cannot produce due to a factory strike, the carrier cannot load or unload due to a dock strike, or the buyer cannot take delivery due to a port strike. Precautions: 1) The scope of the strike should be clearly defined (e.g., limited to a specific port or a nationwide strike); 2) Notification obligations and supporting documents (e.g., union certification) should be stipulated; 3) Distinguish strikes from general force majeure; some contracts list strikes separately; 4) Note the difference from a 'force majeure clause': a strike clause is more specific, but if the contract already has a force majeure clause covering strikes, there is no need to duplicate. Unlike other terms such as 'Lockout', a strike is a voluntary work stoppage by workers, while a lockout is a voluntary work stoppage by the employer. In practice, it is advisable to stipulate that if a strike continues beyond a certain number of days (e.g., 30 days), the parties may negotiate to terminate the contract.