Business and Legal Insights

Hurricane Michael made landfall on the Florida panhandle as the third strongest Atlantic hurricane on record to hit the United States.  Hurricane Michael was the strongest hurricane, in terms of sustained winds, to hit the United States since 1992 when Hurricane Andrew struck South Florida. The destruction left behind by Hurricane Michael has been devastating and life altering for many in Florida’s panhandle and Big Bend regions.

In the construction industry, a natural disaster such as Hurricane Michael often leaves contractors wondering “what now?” Hurricanes can render construction projects completely helpless and, at the very least, result in long delays and extensive damages. In Florida, it is essential that construction contracts contain a “force majeure” clause that addresses natural disasters or events out of the control of the contracting parties.

Force majeure is a French phrase that literally translates to “superior force.”  Force majeure clauses will define the events that are covered within the clause.  These events can be defined broadly or narrowly depending on the type of project, the parties involved, and the “unforeseen” events that may interrupt a project.  These clauses may be narrow in scope by simply allowing for additional time added to a deadline in order to complete the contract.  Or, the clause may include for shortages in labor or materials as well.  It’s important that the clause clearly states what events are covered, the remedies following one of the outlined events, and the parties’ obligations and responsibilities under the terms of the contract after an event has occurred.

Questions to keep in mind when creating a force majeure clause:

1. Will the clause provide for temporary or permanent suspension of duties?
2. What types of events will be covered under the clause?
3. Do different events allow for different amounts of time extensions?
4. Who has the duty to notify the other party regarding the commencement and completion of the force majeure event?
5. Which deadlines will the clause apply to? Every deadline in the contract or only specific deadlines?
6. Will there be differing forms of relief for events of different severity?

Each of the last three years Florida has seen at least one hurricane make landfall with the peninsula.  Floridians appreciate the risks associated with hurricanes and the destruction they leave behind.  It is crucial that contractors appreciate those risks as well when drafting their contracts.