Oklahoma “Force Majeure”: A term with which you need to become familiar

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Despite the fancy French name, Force Majeure is not a French pastry or some act that adults perform with each other in adult settings. Force Majeure is a term that you will hear with ever-increasing frequency as the global coronavirus pandemic continues. 

What is Force Majeure? How is Oklahoma Force Majeure treated? Read on to find out.

What is Force Majeure?
Force majeure is an “event or effect that cannot be reasonably anticipated or controlled;” Force majeure translates literally from French as superior force (Merriam Webster).   Natural disasters, fires, floods, earthquakes, wars are the type of events that could be considered Force Majeure events.  You have probably seen Force Majeure referred to often as an “Act of God.”

Where do you find Force Majeure?
Many Oklahoma contracts contain Force Majeure clauses.  This type of clause excuses one party to a contract from doing what the contract requires the party to do.  For example (particularly relevant to Oklahoma), Force Majeure clause in a take or pay natural gas contract to both stops taking gas and refuses to pay for gas.  The Force Majeure clause provides the reason to not perform.

What is an example of a Force Majeure clause in a contract?
For Cox Communications business service customers, there is this force majeure clause:

A10. Force Majeure. Customer shall have no claim against Cox for any failure to perform caused by (i) acts of God or natural disasters, including, without limitation, fire, flood, hurricane, inclement weather, or winds, (ii) civil or military action, including, without limitation, a national emergency, riot, civil insurrection, act of terrorism, or the taking of property by condemnation or eminent domain, (iii) strikes or labor disputes; (iv) fuel or energy shortages; (v) laws, orders, rules, regulations, directions, or actions of governmental authorities having jurisdiction over the Services; (vi) delays in obtaining permits or other approvals from governmental authorities for Services provisioning; (vii) third party cable cut(s) or (viii) any other causes beyond the reasonable control of Cox (each a ”Force Majeure” event).

Consider this clause from a take or pay natural gas contract:

17.1 If either Buyer or Seller is rendered unable, wholly or in part, by force majeure or any other cause of any kind not reasonably within its control, to perform or comply with any obligations or conditions of this contract, such obligations or conditions shall be suspended during the continuance of the inability so caused and such party so rendered unable shall be relieved of liability and shall suffer no prejudice for failure to perform the same during such period . . .
provided, obligations to make payments then due for gas delivered hereunder shall not be suspended, and in other cases, the cause of suspension (other than strikes, lockouts, or labor disputes) shall be remedied insofar as possible with reasonable dispatch. Settlement of strikes, lockouts, and labor disputes shall be wholly within the discretion of the party having the difficulty. The term “force majeure” shall include, without limitation by the following enumeration, acts of God and of the public enemy, unseasonal weather, freezing of wells of lines of pipe, repairing or altering machinery or lines of pipe, fires, accidents, breakdowns, strikes, labor disputes, and any other industrial, civil or public disturbance, inability to obtain materials, supplies, rights-of-way on customary terms, permits, or labor, any act or omission by parties not controlled by the party having the difficulty, any act or omission (including failure to take gas) of a purchaser of gas from Buyer which is excused by any event or occurrence of the character herein defined as constituting force majeure, failure of gas supply or markets, and any laws, orders, rules, regulations, acts, or restraints of any governmental body or authority, civil or military, or any other causes beyond the control of the parties hereto.

How can a Force Majeure clause impact a contract?
Simply put, Force Majeure usually means – I can’t do what I am supposed to do under the contract because this crazy unforeseen event has happened.  If a contract includes a Force Majeure (not all contracts do) provision, something like the coronavirus pandemic might activate such a clause.

Why is Force Majeure relevant now?
The coronavirus pandemic, which has triggered a National Emergency in the United States is likely a “Force Majeure” event.  Many, many contracts have force majeure provisions and with the coronavirus emergency, many, many of those provisions are triggered. Of all the many things that the coronavirus pandemic is, it is certainly unforeseen and unlike anything, I have seen in my lifetime.

How does Oklahoma law treat Force Majeure?
Oklahoma law recognizes Force Majeure when it is included in a contract.  Oklahoma courts have considered Force Majeure contract clauses in several different types of cases:

— > take or pay oil and gas contracts
— > Homeowner’s Association Covenants, Conditions, and Restrictions; and
— > Mineral Lease.

 

 

Posted by Shawn Roberts

On this blog, I write about and try to answer practical Oklahoma legal questions. My focus and most experience is in estate planning and business issues including Oklahoma non-compete law. I make a living as an attorney in the law firm I founded, Cazes Roberts, PLLC in Oklahoma City. I live in Edmond with wife Amy and my two children, Sam (17) and David (9). We live precisely in the path of where the "wind comes sweeping down the plains."