Force Majeure and Impracticability: When Performance Is Excused

Force majeure is not a background principle of American contract law that switches on when something bad happens. Outside sales of goods, it is a creature of the contract: if your agreement has no force majeure clause, you generally have no force majeure defense, and you fall back on much narrower common-law doctrines. If your agreement does have one, the question is whether its specific words reach the event you are facing — because courts read these clauses narrowly and against the party seeking to escape. Cornell's Legal Information Institute summarizes the basic contours of force majeure in the same terms.

There are three separate routes to excused performance, and they are often confused. The contractual route is the clause itself, governed by state common law of contract interpretation. The statutory route applies to sales of goods: UCC § 2-615 excuses delayed or non-delivery when performance has been made impracticable by an unforeseen contingency whose non-occurrence was a basic assumption of the deal. The equitable route is common-law impossibility, impracticability, and frustration of purpose. Each has different requirements and different results.

Start with the four moving parts of the clause

Force majeure clauses look boilerplate and are not. Break yours into components before arguing about it.

1. The enumerated list. War, terrorism, fire, flood, earthquake, strike, embargo, government order, epidemic or pandemic. If your event appears by name, you are in a far stronger position than if you are arguing by analogy.
2. The catch-all. Phrases such as "any other cause beyond the reasonable control of the affected party" are common, but many states apply an interpretive rule that reads a general catch-all as limited to events of the same kind as the specific items listed. A list of natural disasters may not stretch to cover a labor shortage or a price spike.
3. The causal standard. "Prevented from performing" is close to impossibility. "Delayed or hindered" is materially easier to satisfy. "Rendered commercially impracticable" borrows the UCC standard. One word here often decides the dispute.
4. The consequences. Does the clause suspend performance, extend deadlines, permit termination after a stated period, or excuse the obligation entirely? Does it excuse payment obligations, which many clauses expressly do not?

Sales of goods: impracticability under UCC § 2-615

Article 2 supplies an excuse doctrine that applies even without a contract clause, and it belongs only to sellers. Under § 2-615 as adopted in each state, a seller's delay or non-delivery is not a breach if performance as agreed has been made impracticable by the occurrence of a contingency whose non-occurrence was a basic assumption on which the contract was made, or by good-faith compliance with a governmental regulation or order. The seller must notify the buyer of the delay or non-delivery. Where the constraint affects only part of the seller's capacity, § 2-616 and related provisions require the seller to allocate production among customers in a fair and reasonable manner and give the buyer the choice of accepting the reduced quantity or terminating.

The bar is real but not sentimental. Increased cost alone does not excuse performance; courts have long treated a rise in prices — even a sharp one — as an ordinary market risk the seller assumed. What can qualify is a severe shortage caused by an unforeseen event, the destruction of an agreed-upon source of supply, or a government order that makes performance unlawful. The model text is maintained by the Uniform Law Commission and reproduced by Cornell's UCC collection, but each state has enacted its own version, occasionally with variations.

Common law: impossibility, impracticability, and frustration

Where no clause applies and the deal is not a sale of goods, three related doctrines remain — and they are exits of last resort.

Frustration of purpose is the doctrine most often argued and least often won. The classic pattern is a tenant who can still pay rent and a landlord who can still supply premises, but the reason the tenant took the space has evaporated. Courts ask whether the frustrated purpose was known to both sides and was the foundation of the deal, not merely one party's motive. Many state courts also refuse relief where the contract allocated the risk, expressly or by implication.

The procedural traps: notice, mitigation, and duration

Substantive entitlement is only half the problem. Clauses commonly impose conditions that a disrupted business forgets in the middle of a crisis.

• Written notice within a short window — often five to thirty days of the event or of becoming aware of it — sent by the exact method the notice clause specifies.
• A description of the event, the obligations affected, and a good-faith estimate of the duration.
• Evidence of reasonable efforts to mitigate: alternative suppliers contacted, expedited freight priced, substitute personnel considered.
• Periodic updates, and prompt notice when the event ends.
• A contemporaneous file of government orders, carrier notices, supplier declarations, and internal decisions — the record that makes the defense provable months later.

Duration matters too. Many clauses let either party terminate if the force majeure continues beyond a stated period, which can turn a temporary excuse into a permanent loss of the contract. Long-term supply, software, and outsourcing agreements often pair this with a step-in or alternative-sourcing right; that interaction is one of the negotiating points in SaaS and software contracts.

Drafting the clause you will actually want

Because interpretation is narrow, precision at signing is worth more than argument later. Name the specific events your business realistically faces — supplier insolvency, cyber incidents, transport closures, epidemics, regulatory bans — rather than relying on a catch-all. State the causal standard deliberately: "prevents, hinders, or delays" if you may need to invoke it, "prevents" if you are more likely to receive the notice. Say explicitly whether payment obligations are excused. Add the notice mechanics, a mitigation duty, an allocation rule for partial capacity, and a termination right after a defined period.

Quick answers

Does a price increase count as force majeure?

Almost never on its own. Both contractual clauses and UCC § 2-615 are aimed at events that make performance impracticable, not merely unprofitable. Courts have repeatedly held that market movements — including substantial ones — are risks the parties took. A price spike may support excuse only when it is the symptom of a qualifying event, such as a government embargo or the destruction of an agreed-upon supply source.

My contract has no force majeure clause. Am I out of options?

Not entirely, but your options narrow. For goods, a seller can still argue § 2-615 impracticability under state-enacted Article 2. For other contracts, you are left with common-law impossibility, impracticability, or frustration of purpose, all applied strictly and inconsistently across states. Commercial negotiation — an amendment, a standstill, or a revised schedule — is often the more realistic path.

Does a government order automatically excuse performance?

It helps significantly but is not automatic. Under Article 2, good-faith compliance with an applicable governmental regulation or order is a recognized basis for excuse. Under a contract clause, it depends on whether "government action" is listed and whether the order actually prevented the specific obligation. An order that merely made performance harder or less profitable is treated differently from one that made it unlawful.

Can I invoke the clause and keep the contract alive?

Usually yes — most clauses suspend rather than terminate. Performance deadlines extend for the duration of the event, and the contract resumes afterward, unless the disruption runs past the termination threshold the clause sets. Send the required notice, document mitigation, and confirm in writing when you resume so the record shows the suspension had defined start and end points.

Who decides whether the event qualifies?

Ultimately a court or arbitrator applying your governing state's law, which is why the governing-law and dispute-resolution clauses matter as much as the force majeure clause itself. In practice most disputes settle on the strength of the paper trail: the notice, the contemporaneous evidence, and whether the invoking party behaved consistently with a genuine inability to perform.

Where this leaves you

Pull the contract before you pull the trigger. Identify whether the deal is goods or services, find the clause, and parse its list, catch-all, causal verb, and consequences. Send the notice the clause requires, on time and by the specified method, and start a mitigation file the same day. If there is no clause, assess whether Article 2 excuse or a common-law doctrine is genuinely available in your state before announcing a position you cannot support. And when the disruption passes, fix the clause — including how it interacts with assignment and change-of-control provisions if the counterparty may be sold mid-crisis. Related drafting and dispute questions are collected in the Business Formation & Contracts pathway.