A set of events such as war, terrorism, nuclear, chemical or biological contamination or pressure waves caused by devices moving at supersonic speed which are not the fault of either party but which are best managed by Project Co. Ultimately if the events persist this may lead to the ability to terminate. Because of the existence of a detailed regime of other supervening events, and (usually) a requirement for Project Co to hold various insurances, this concept tends to be more tightly and exhaustively defined in PFI/PF2 agreements than might be the case in other, more 'standard' commercial contracts.

What is a force majeure clause Contractual force majeure (FM) clauses contain provisions which, where specified types of unforeseen circumstances beyond a contractual party’s control prevent performance: • excuse the affected party from performing in whole or in part, or allow it to suspend performance of, its contractual obligations • allow the affected party a time extension in respect of time bound contractual obligations • in many cases, provide for termination of the contract where there is prolonged force majeure preventing performance The vast majority of international business agreements include FM clauses in their provisions. However, there is no universal definition of ‘force majeure’ as such or of the specific circumstances which give rise to it, since different jurisdictions adopt different approaches. While civil law countries often include express definition of force majeure in their national codes, there is no doctrine of force majeure under the laws of England and Wales. Therefore, in its absence commercial parties can only rely on the doctrine of frustration of contract, which is based upon a certain event

An unexpected and exceptional event that allows one party to terminate the contract without being liable for damages.

Definitions Business Continuity Event • means an event (whether a natural or man-made phenomenon or occurrence), which interrupts the normal business activities, including business functions, operations, or processes of the Customer, (whether anticipated or unanticipated), and which prevents or delays a party from performing its obligations to third parties or receiving the full benefit of the provision of the services in accordance with the provisions of this Agreement; [Force Majeure • means an event or sequence of events beyond a party’s reasonable control preventing or delaying it from performing its obligations under this Agreement. [Insert circumstance not constituting force majeure eg a Business Continuity Event, inability to pay] is not Force Majeure. OR Force Majeure • means any event or sequence of events beyond a party’s reasonable control[ and in the case of the Supplier that could not have been reasonably anticipated (such as an event which is anticipated in the Business Continuity Plan) or avoided] and which prevents it from, or delays it in, performing its obligations under this Agreement including, but not limited to, (a) an act of God, fire, flood,

COVID-19 as a recent example of a significant market disruption In the first half of 2020, the oil market was facing shrinking capacities to store over-supplied oil, collapsing prices and plummeting demand. Oil and gas operators and companies in the supply chain took steps to reduce activity and investment to protect cash flows. Capex was reportedly reduced by tens of billions of dollars; contracted rigs were suspended, cold-stacked or cancelled; development of offshore fields were being delayed; and decommissioning and abandonment activity was pushed forward. Meanwhile, coronavirus (COVID-19) spread across offshore facilities and vessels. Under normal circumstances, 11,500 people would on average be working on North Sea projects at any one time. According to Offshore Energies UK (formerly known as Oil & Gas UK), the UK industry trade body, by 20 March 2020, this figure was down by 4,500 (approximately 40%). This raised difficult logistical decisions. What happens when those with the necessary expertise are quarantined?

Commercial analysis: Glenn Kangisser, partner, and Maren Strandevold, associate, both at Haynes and Boone CDG, consider the practical implications of the judgment in Seadrill Ghana Offshore Ltd v Tullow Ghana Ltd, in which the Commercial Court held that the defendant was not entitled to terminate a drilling contract for force majeure, and commented on the exercise of reasonable endeavours to overcome a force majeure event.

Coronavirus (COVID-19): In addition to the below content on force majeure generally, see also: • Coronavirus (COVID-19) toolkit—Contracts • Coronavirus (COVID-19) and contractual obligations—checklist together with the Q&As (in the related content pod on the right hand side) for specific guidance on the issues to consider if your contract is impacted by coronavirus. Force Majeure means an event or sequence of events beyond a party’s reasonable control preventing or delaying it from performing its obligations under this Agreement. [Insert circumstance not constituting force majeure eg Inability to pay] is not Force Majeure. Definition—Force Majeure (long form) Force Majeure means any event or sequence of events beyond a party’s reasonable control[ and that could not have been reasonably anticipated or avoided] and

This Practice Note provides a step-by-step process for analysing and invoking a force majeure clause. It must be read in conjunction with Practice Note: Force majeure—consequences and contract discharge. This illustration indicates the steps involved in determining the effective use of a force majeure clause: Stage 1—is there a force majeure clause? There is no legal concept in English law of ‘force majeure’ (contrast this with countries which apply a civil code specifically recognising force majeure, eg France). Therefore if your client wishes to avoid or limit their liability because of an inability to perform caused by an event such as, eg the coronavirus (COVID-19) pandemic (as was seen in 2020) or the imposition of financial sanctions against Russian entities and individuals/impact of Russia’s invasion of Ukraine in February 2022, then you will need to check that the relevant agreement contains a force majeure clause. For guidance on breaching contractual terms due to financial sanctions more generally, see Practice Note: Statutory controls in contract breach scenarios. As with any contractual clause, how the force

Force majeure means an act of God including but not limited to fire, flood,

Coronavirus (COVID-19): In addition to the below content on force majeure generally, see also: • Coronavirus (COVID-19) toolkit—Contracts • Coronavirus (COVID-19) and contractual obligations—checklist together with the Q&As (in the related content pod on the right hand side) for specific guidance on the issues to consider if your contract is impacted by coronavirus. Force Majeure Event means an event or sequence of events beyond a party's reasonable control preventing or delaying it

What is force majeure? Force majeure is used to describe an event that occurs which is beyond the control of the parties, and which prevents them from fulfilling their contractual obligations. The courts have previously held that force majeure is an event which goes beyond what the courts understand by the terms 'act of God' or 'vis major'. There is, however, no precise legal definition of force majeure, and so the question of what constitutes a force majeure event will turn on interpretation of the contract. Standard form building contracts deal with force majeure in different ways (see below: Force majeure in standard form building contracts). Parties may, or may not, choose to incorporate a definition of what constitutes force majeure into their contract. It can be difficult therefore to predict with certainty what will constitute force majeure in any context—and the wording of any force majeure clause and the particular circumstances will have to be examined in every case. This Practice Note considers force majeure in the context of construction contracts. For consideration of force

Dear [insert name of Party B or its representative] [insert name and date of agreement] [Our client: [insert client name] OR [Insert name Party A]] [Your client: [insert client name] OR [Insert name Party B]] 1 [ [As you are aware, we OR We] act for [insert client name] ([insert short name Party A]).] 2 [We are writing with formal confirmation of the information conveyed to you in the [letter OR e-mail OR telephone call] of [insert date] from [insert sender] to [insert recipient].] 3 [Our client OR