In Texas, like most states, performance under a contract containing a force majeure clause may be excused by acts of god or other exigent circumstances defined by the clause. Force majeure is a creature of contract and will only be applicable to the extent expressed in the contract. “The scope and effect of a “force majeure ” clause depends on the specific contract language, and not on any traditional definition of the term.” Virginia Power Energy Mktg., Inc. v. Apache Corp., 297 S.W.3d 397, 402 (Tex. App.—Houston [14th Dist.] 2009, pet. denied). As will be explained, these clauses may very well excuse contractual performance when the delay or failure to perform is being caused by the COVID-19 pandemic.
“Force majeure” is French for “a superior force” and is defined as:
“An event or effect that can be neither anticipated nor controlled; esp., an unexpected event that prevents someone from doing or completing something that he or she had agreed or officially planned to do. •The term includes both acts of nature (e.g., floods and hurricanes) and acts of people (e.g., riots, strikes, and wars).
FORCE MAJEURE, Black’s Law Dictionary (11th ed. 2019)
A typical force majeure clause will excuse performance under the contract when the delay or failure to perform is caused by acts beyond the nonperforming party’s control. The clause may specify that this includes acts of god, natural disasters, war, governmental actions, strikes, and other similar events. Further, there is no lack of foreseeability requirement, if the event is listed in the force majeure clause. Kodiak 1981 Drilling P’ship v. Delhi Gas Pipeline Corp., 736 S.W.2d 715, 721 (Tex. App.—San Antonio 1987, writ ref’d n.r.e.)
As a result of the COVID-19 pandemic, governmental orders have been issued closing businesses and schools, restricting travel, ordering workers and consumers to stay home, and disrupting supply chains. Thus, if your business is unable to timely perform its obligations under a contract because of COVID-19 events, the first place you should look for answers is in the written contract. If it contains a force majeure clause, your business’s performance under the contract may very well be excused by the express language of the contract. Stay tuned for what to do if your contract does not contain a force majeure clause.