Force Majeure After the Pandemic: What Corporate Contracts Still Get Wrong

The pandemic produced more force majeure litigation in 18 months than the prior two decades combined. Courts across jurisdictions worked through fundamental questions about what force majeure clauses do and don't cover — and the answers were not always what corporate legal teams expected. Despite this stress test of real-world enforceability, most corporate contract templates in 2024 still contain force majeure provisions that replicate pre-pandemic drafting conventions that the litigation record has shown to be inadequate in ways that are now well-documented.

What Force Majeure Litigation Taught Us

The litigation pattern from 2020-2022 revealed several consistent force majeure clause weaknesses. The most significant was definitional scope: clauses that listed specific triggering events (hurricanes, earthquakes, acts of war) and then included a general catch-all phrase like "or other events beyond a party's reasonable control" were interpreted narrowly by many courts, which required that the triggering event be of the same character as the listed examples — a principle called ejusdem generis. Pandemic-related government orders were not obviously within the character of the listed events in many older contracts, and parties who relied on catch-all language to excuse performance often lost.

The second major issue was the causation requirement. Many force majeure clauses require that the force majeure event be the direct cause of nonperformance — not merely a contributing factor. In pandemic contexts, the causal chain was often indirect: a government lockdown order affected a supplier, which affected delivery to the primary vendor, which affected performance to the end customer. Courts often declined to extend force majeure protection down multi-tier causation chains unless the clause specifically addressed supply chain disruption scenarios.

The third issue was the distinction between impracticability and impossibility. Some force majeure clauses require that performance be impossible — literally cannot be done. Others require only that it be impractical or commercially unreasonable. Parties whose obligations had become dramatically more expensive but not technically impossible frequently found that "impossible" standard clauses didn't protect them, regardless of how much the economics of performance had changed.

What Template Updates Should Address

Four specific drafting gaps in standard force majeure provisions need to be addressed in updated templates:

Pandemic and public health events as enumerated triggers: Rather than relying on catch-all language to cover pandemics, updated templates should explicitly enumerate "pandemic, epidemic, public health emergency, or government order issued in response thereto" as qualifying force majeure events. Explicit enumeration removes the ejusdem generis risk entirely.

Supply chain disruption coverage: Updated clauses should address whether supply chain disruptions count as force majeure events and, if so, at what tier. A provision that covers "force majeure events affecting the party's supply chain, including events affecting third-party suppliers on whom the party reasonably relies for performance" extends protection to indirect causation chains in a way that standard cause-language does not.

Impracticability vs. impossibility: Unless there's a specific reason to use an impossibility standard, updated templates should use impracticability — "makes performance commercially unreasonable" — rather than impossibility as the triggering threshold. The impracticability standard is more aligned with commercial reality and with the UCC framework that governs many commercial agreements in the US.

Notice mechanics and mitigation obligations: Most force majeure clauses require notice within a specific period and impose a mitigation obligation on the party claiming force majeure. Updated templates should specify what constitutes adequate notice (including method, recipient, and required content), define the mitigation standard, and address what happens if mitigation efforts are partially successful — does the clause cover residual nonperformance, or only total nonperformance after mitigation?

Existing Contract Portfolio: The Audit Case

Updated templates apply prospectively. The more pressing question for most in-house legal teams is what force majeure provisions their existing contract portfolio contains, and specifically which contracts have the drafting weaknesses identified above.

A force majeure audit of an existing contract portfolio should categorize each contract's force majeure provision along four dimensions: event scope (enumerated events only, enumerated plus catch-all, open-ended), causation standard (direct cause only, indirect/supply chain, not specified), performance standard (impossibility, impracticability, not specified), and notice requirements (specified window and method, general notice, not specified). This categorization allows the legal team to prioritize renegotiation of the most deficient provisions based on contract value and risk profile.

Clause extraction significantly accelerates this audit. Force majeure provisions are syntactically recognizable — most contain the phrase "force majeure" or "events beyond a party's control" — and extracting them from a large contract portfolio is tractable. The harder step is categorizing each provision along the four dimensions above, which requires more sophisticated extraction or human review of the extracted text.

Cybersecurity Events as Force Majeure: An Emerging Question

A question that most force majeure provisions haven't resolved yet is whether a significant cybersecurity incident — a ransomware attack that disrupts operations, a supply chain compromise that takes a key vendor offline — qualifies as a force majeure event. The answer depends on how "beyond a party's reasonable control" is interpreted, and courts have not yet developed a consistent approach.

The arguments against cyber event force majeure are compelling: cybersecurity incidents are foreseeable risks for which parties can take precautions, and courts have generally been reluctant to extend force majeure protection to risks that diligent parties should have mitigated. But the arguments for coverage in extreme cases — a nation-state attack on critical infrastructure, a widespread supply chain compromise affecting an entire industry — have merit when the event is genuinely unforeseeable and unprecedented in scale.

Forward-looking force majeure provisions that want to address cyber events explicitly need to draw a careful distinction between ordinary cyber incidents (which shouldn't excuse performance, since they're insurable foreseeable risks) and catastrophic cyber events at a scale that makes them more analogous to natural disasters. This distinction is drafting-intensive and not yet standardized — which means it's a drafting area worth investing attorney attention in updating playbooks and templates now, before the question arises in a contract dispute context.

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