Clauses With A Specific Listing of Triggering Events and Catch-All Language
The trickiest force majeure clauses to correctly interpret are those that have a list of specific triggering events as well as catch-all language. Consider, for example, a force majeure clause that states it applies to “acts of terrorism, riots, strikes, natural disasters resulting from weather, any other events not reasonably foreseen and not within the reasonable control of the parties.” On its face such broad, inclusive language would seemingly include the unprecedented impacts of a communicable disease pandemic. However, case precedent injects ambiguity into how such language would be interpreted.
In a 2007 case, Team Mktg. USA Corp. v. Power Pact, LLC, a New York court considered a force majeure clause in the context of a contract for the staffing of Toyota promotional marketing events. The force majeure clause stated that it applied “if the subject promotion could not take place or the promotor was rendered unable to timely perform any of its obligations “for any reason, including, without limitation, strikes, boycotts, war, Acts of God, labor troubles, riots, and restraints of public authority.” Surprisingly, the court held that language did not cover non-party Toyota’s cancellation or rescheduling of the promotion schedule because that type of event was not of “the same general kind or class” as the events specifically listed, notwithstanding the “for any reason” catch-all. (See Team Mktg. USA Corp. v. Power Pact, LLC, 41 A.D.3d 939, 942, 839 N.Y.S.2d 242 (2007).)
An Indiana court reached a contradictory result in a 2013 case, Specialty Foods of Indiana, Inc. v. City of S. Bend. There, the court addressed a force majeure clause in the context of a contract for providing food and beverage services at the College Football Hall of Fame in South Bend, Indiana. During the contract term the Hall of Fame unexpectedly relocated from South Bend to Atlanta, Georgia. The force majeure provision of the contract excused performance if prevented “by reason of strikes, lockouts, inability to procure labor or materials, failure of power, fire or other casualty, acts of God, restrictive governmental laws or regulations, riots, insurrection, war or any other reason not within the reasonable control of” the party required to perform. The court found the “any other reason” language of the clause made it broadly applicable to the unforeseen relocation of the Hall of Fame, even though relocation was not included in, or similar to, the specifically listed events. (See Specialty Foods of Indiana, Inc. v. City of S. Bend, 997 N.E.2d 23, 27-28 (Ind. Ct. App. 2013).)
Given the existence of such contradictory case precedent, anyone assessing rights under a contract with a force majeure clause should engage experienced counsel to analyze the clause under applicable state law and the cases that have been decided in that state, particularly if the clause includes both a specific list of triggering events and catch-all language. Getting a handle on how the clause is likely to be interpreted under applicable state law will put you in the best position to accurately assess your rights and obligations, and to plan a course of action.