Force majeure in Government Contracts: What You Need to Know
Force majeure is an important concept in government contracting, but it is often misunderstood. In short, force majeure refers to unexpected events that are beyond the control of both parties to a contract, and that prevent one or both parties from fulfilling their obligations.
Examples of force majeure events include natural disasters, wars, strikes, and pandemics, among others. When force majeure events occur, they can sometimes make it difficult or impossible for a contractor to deliver goods or services, or for the government to pay for them as agreed.
To account for these types of events, most government contracts include force majeure provisions. These provisions generally allow the parties to suspend or modify their obligations in the event of a force majeure event, without being held liable for breach of contract.
However, it is important to note that force majeure clauses are not always included in government contracts, and when they are, they may not be identical from contract to contract. It is essential that contractors and government agencies alike review their contracts carefully to ensure they understand how force majeure is defined and what their obligations are in the event of a force majeure event.
In addition, it is critical to note that force majeure events do not automatically excuse all performance under a contract. Generally, the party affected by the force majeure event must take reasonable efforts to mitigate the effects of the event and, if possible, fulfill its obligations as much as possible under the circumstances.
For contractors, this may mean seeking alternative suppliers or delivery methods, or requesting an extension of time to complete the work. For government agencies, it may mean adjusting their expectations for delivery or payment schedules, or seeking alternative sources of goods or services.
In some cases, force majeure events may also trigger other provisions in a government contract, such as termination for convenience or default. In these situations, it is critical to work with legal counsel to understand your rights and obligations under the contract.
In conclusion, force majeure events can have a significant impact on government contracts, and it is critical for both contractors and government agencies to understand how force majeure is defined in their contracts, and what their obligations are in the event of a force majeure event. By taking appropriate steps to mitigate the effects of these events and work collaboratively, both parties can minimize the disruption to their business and protect themselves from unnecessary liability.
