Make sure that contract protects you if disaster strikes

Paris, 1 March 2003 - Amid mounting international tensions and fears of terrorism, companies negotiating contracts need to be especially careful to allow for unforeseen events beyond their control.

The remedy lies in the wording of the contract, which should contain a watertight force majeure clause that a company can invoke to justify any failure to meet its obligations, thereby avoiding legal penalties.

War, civil war, acts of piracy or sabotage, riots and insurrections can all leave a company powerless to meet its contractual obligation. So can events covered by the legal term "acts of God" - earthquakes, blizzards, tidal waves, electric storms and other natural disasters.

Eminent international lawyers have designed ICC Force Majeure Clause 2003 to make it easier for companies and their lawyers to negotiate contracts that are fair to both parties but provide adequate safeguards if disaster strikes.

A companion clause is ICC Hardship Clause 2003, which provides for renegotiation when continued performance of contractual duties has become excessively onerous due to an event beyond the party's reasonable control.

Both clauses, together with explanatory notes that point out pitfalls and legal fine points, may be ordered online from the Business Bookstore, from ICC Publishing SA and through ICC national committees throughout the world. The publication to ask for is ICC Force Majeure Clause 2003 and ICC Hardship Clause 2003.

In a foreword, ICC Secretary General Maria Livanos Cattaui writes: "Negotiating force majeure and hardship clauses means operating at the very core of the contract, and it is important that the clauses are balanced and apply equally to all parties to the agreement."

A task force of the ICC Commission on Commercial Law and Practice, headed by Professor Jan Ramberg of Sweden, drafted the clauses. Draftsman-in-chief was Professor Charles Debattista (United Kingdom). Other members were Professor Filip de Ly (Netherlands), Alexis Moure (France), René von Samson-Himmelstjerna (Germany), Fabian von Schlabrendorf (Germany) and Peter Delargy (France).

Professor Debattista will be chairing a conference at ICC Headquarters on 8 April to officially launch the two clauses.

To view the programme and to register for 'New Clauses for Business: ICC Force Majeure and Hardship Clauses 2003' click here.