0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

was the recession a force majeure event?

27 January 2010

The UK has just this week reportedly emerged from recession but the pain is still being felt by suppliers and customers throughout the UK.

It has been the cause of many breached contracts, failed deliveries and missed payments over the last few months, a fact that’s unlikely to change as a result of the economic growth figures.

But what if you can no longer perform your part of a bargain because the funding you thought you had in place is no longer available? Should you be able to escape your obligations?

What about if you were aware of a clause in your contract allowing you to escape liability for “force majeure events”?

Sadly for the purchaser of an executive jet aircraft whose case was heard this month, such a clause, by itself, may not help.

It seems only right that force majeure should not include economic downturns, particularly where it is possible for the parties to deal with a lack of funding another way – by using a “hardship” clause or to make the deal dependent upon the purchaser first obtaining funding.

For those suppliers facing unwilling purchasers (or would-be purchasers waiting for deliveries) this case is likely to be welcomed. The recession (and its consequences) wasn’t a force majeure event, nor should it be treated as one, but rather a challenge that buyers and sellers must face together on their own terms.

related opinions

Artificial intelligence in legal and contracting

With its claims to disrupt and transform many areas of our lives, AI is now part of our day to day vocabulary.

View blog

Brexit frustration

Are you frustrated by Brexit? If so, that’s more than can be said of the European Medicines Agency’s (EMA) £13m a year lease at Canary Wharf.

View blog

Transformative health-tech in 2018

Last week, the annual Consumer Electronics Show in Las Vegas showcased some emerging consumer technologies - from a sensor which tests food for peanuts to air-bags for your hip.

View blog

Is the fact enforcement would be a “complete nightmare” reason enough for security for costs?

The Royal Bank of Scotland is current embroiled in a £12billion class action brought by its former shareholders over the bank’s fundraising before its 2008 government bailout.

View blog

mailing list sign up



Select which mailings you would like to receive from us.

Sign up