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Force Majeure in the Design & Construction Industry


from DESIGNPRO Insurance Group

Force Majeure in the Design & Construction Industry

A force majeure clause is a contractual provision that excuses one or both parties from fulfilling in whole or part obligations when unforeseeable, uncontrollable events—such as natural disasters, war, or pandemics, acts of God, etc. It essentially makes performance impossible, or at least very impractical. It protects parties from liability for non-performance due to circumstances beyond their control.

"Majeure" is the feminine form of the French word majeur, which translates to English as “major, greater, significant, or of legal age.” It refers to something of higher importance (a "major" event). In the common legal phrase force majeure translates to "superior force" or uncontrollable events.

IN THE DESIGN AND CONSTRUCTION INDUSTRY

The clause typically applies when one party in a contract is delayed according to an imposed project schedule. Delays in delivery of construction materials or meeting scheduled project dates due to a force majeure event shall extend the time frame for a period of time equal to the duration of the delay.

The delay must not be caused by the party. And the delay must prevent, rather than just hinder performance. Invoking the clause usually allows for the temporary suspension of obligations or termination of the contract if the delay persists. It shields the non-performing party from damages or breach of contract claims. The party invoking the force majeure must typically notify the other side within a specific (at least a reasonable) timeframe to rely on the clause.

AS APPLIED IN A COURT

The problem is that some courts may interpret these clauses narrowly, meaning only listed events may qualify. Mere financial difficulty, unprofitability, or increased cost of performance rarely qualifies as a force majeure event. If a party could have anticipated the delay, they may not be able to rely on the clause. In common law jurisdictions (like the UK or US), it generally only applies if specifically written into a contract.

THE BOTTOM LINE

The scope of a force majeure clause is determined by the specific language agreed upon in the contract, often requiring legal consultation to determine if a particular event justifies non-performance. Once causes for such exemption of liabilities are rectified and remedied, both parties agree to resume performance of the contract within their contractual obligations. However, such party shall continue to perform other obligations under a contract which have not been affected by such force majeure.

When reviewing a contract, at a place where it speaks to the project or the design professional’s schedule of services, it would be good risk management to insert a comment something like the following:

With regard to the schedule of services and the Project schedule, the design professional will not be liable for inadequate or non-performance to the extent caused by a condition (including but limited to, for example, natural disaster, act of war or terrorism, riot, labor condition, governmental action, and Internet disturbance, etc.) that was or is beyond the design professional’s control.

It is argued that a force majeure clause is somewhat related to a “liquidated damage” clause (the subject of DesignPro Insurance Group’s next risk management article Building Blocks in April 2026).

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About the Author of this Risk Management Building Block Article

As a risk manager for the last 20 years for the design profession, Eric O. Pempus, FAIA, Esq., NCARB has experience in professional liability insurance and claims, architecture, engineering, land use, law, and a unique background in the construction industry. Prior to risk management, he has 25 years of experience in the practice of architecture/engineering, and as an adjunct professor teaching professional practice courses at the undergraduate and graduate levels for 37 years at Kent State University’s College of Architecture & Environmental Design.

As a Fellow of the American Institute of Architects and AIA National Ethics Council 2021 Chair, he has demonstrated his impact on architectural profession. He has presented numerous loss prevention and continuing educational programs to design professionals since 2000 on topics of ethics, contracts, and professional practice in various venues across the United States and Canada. He is a former member and chair of his city’s Board of Zoning & Building Appeals for 24 years, and is a licensed architect, attorney, and property & casualty insurance professional.

His educational background includes a JD from Southwestern University School of Law, Los Angeles; Master of Science in Architecture from University of Cincinnati; and BA in psychology/architecture from Miami University, Oxford, Ohio.

The above comments are based upon DesignPro Insurance Group’s experience with Risk Management Loss Prevention activities and should not be construed to represent a determination of legal issues but are offered for general guidance with respect to your own risk management and loss prevention. The above comments do not replace your need for you to rely on your counsel for advice and a legal review, since every project and circumstance differs from every other set of facts.

Disclaimer: The viewpoints expressed in this article are those of the author(s) and are not necessarily approved by, reflective of or edited by other individuals, groups, or institutions and this article is an expression by the author to generate discussion and interest in this topic.