Food supply chain contractual considerations: part III

This is the third and final part in the series considering key clauses to consider in standard contracts for the supply of food in response to Brexit and COVID-19. This part considers force majeure clauses.

Force majeure

Force majeure clauses generally operate to suspend a party’s or both parties’ obligations in respect of performance of particular contractual obligations beyond that party’s control. There is no recognised concept of force majeure in English law and so it will not apply unless there is an express clause in the particular contract.

Typically, force majeure clauses will favour a supplier under a supply contract due to most contractual obligations being on the supplier to deliver the produce on time, at the location specified and in the quantity specified. The only significant obligation on the part of the buyer will be to pay for the produce which is unlikely to be affected by a force majeure event.

The extent of the force majeure clause will depend on the particular contract wording and the force majeure events listed in the clause. A force majeure clause will often mention epidemic/pandemic and law or action taken by a government (which may be relevant to Brexit and COVID-19).

Whether the force majeure clause has been triggered will depend on the drafting. If it requires the affected party to be ‘prevented’ from performing its obligations, it will be difficult to rely on. If the force majeure trigger requires the affected party to be “prevented, hindered, impeded or delayed”, it makes it much easier to rely on. The clause will relieve the affected party from its obligations for a period of time. Often, the clause will state that if the force majeure event lasts for a specific period of time as mentioned in the clause, the unaffected party can terminate the contract.

Due to the uncertainty of Brexit and the ongoing COVID-19 pandemic, now is the ideal time to update your standard contracts and consider whether a force majeure clause should be included.

Read the previous articles in this series

• Food supply chain contractual considerations
• Food supply chain contractual considerations: part II

If you would like to discuss this article further and/or have your standard contracts reviewed/amended please contact Jack Shreeve.