In today’s economic climate, most hoteliers have a strong sense of urgency in doing more business with the U.S. Federal Government. Perhaps one of the most important factors in accomplishing this is having a comprehensive understanding of how government contracting works. It goes without saying the federal government has its own set of unique processes and rules. I have found one consistent, absolute condition always surfaces related to government group contracts, which is something called Force Majeure.
Force Majeure is a French term which means “greater force.” Nearly every government contract and/or letter of intent will have a force majeure clause. This clause excuses an interested party from liability if some unforeseen event beyond the control of that party prevents it from performing its obligations under the contract. Typically, force majeure clauses cover natural disasters or other “Acts of God” including war, severe inclement weather or failure of third parties to perform their obligations to the contracting party. It is important to remember that force majeure clauses are intended to excuse a party only if the failure to perform is unpreventable.
One of the most critical components in accepting a force majeure clause is that it benefits all interested parties, versus freeing only one from obligation and accountability. Below is an example of fair and equitable force majeure clause.
FORCE MAJEURE:
No Party shall be liable for any failure to perform its obligations where such failure is as a result of Acts of Nature (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (whether war is declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalization, government sanction, blockage, embargo, labor dispute, strike, lockout or interruption or failure of electricity [or telephone service], and no other Party will have a right to terminate this agreement in such circumstances.
by Chris McLauglin