OCCASIONAL PAPER No.21

by P. E. Healey BSc BA MIOB AIQS

This paper is based on the author's entr! lo lhe 1979 lan Mutay

Leslie Awards u/hich rras awatded the Btunze Medal i the ,oungfiembers' competition. The ews expressed in this pqper are those of

lhe author and not necessarilt lhose of the Inslhule,

D E F I N I T I O N S

Ab initioFrom the beginning.

Ejusdem generis ruleThis rule is_ that general words which follow two or more particular words must be confined to ameaning of the same kind (ejusdem generis) as the particular words.(See Powell v Kempton park Racecourse Co. ( lSgt) A.C. 143)

Obiter dictaThere are two types of obiter dicta;

G) A statement of law is regarded as obiter ifit is based upon facts which either were noi foundto exist, or if found, wete not found to be material.

-

O) A statement of law which, although basecl on the facts found, does not form the basis ofthedecision; for example, a statement oflaw in support ofa dissinting. judgerirent.

- Obiter dicta are not of binding authority but have only pe$uasive authority.

Prirna facie

On the face of it.

C O N T E N T S

DEFINITIONS

IN TRO D UCTION

A D E F I N I T I O N O F F O R C E M A J E U R E

Act of God

Vis major

Force majeure

L I M I T A T I O N S O F

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F O R C E M A J E U R E

D E F I N I T I O N S O F F O R C E M A J E U R E F O R C L A U S E 2 3 ( a )O F T H E J C T S T A N D A R D F O R M O F C O N T R A C T . . .

A P P E N D I X I . Extract from the General Contract of theGrain and Seed Trade Association

Extract from the Standard Trade Customsissued by the British Paper Mills

Extract from the Contract and ContractRules of the Sugar Association of London

A P P E N D I X I I .

APPENDIX I I I ,

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FORCE MAJEURE - An examination of which circumstances are included within Clause 23(a) of the JCT

standard fonh of contract

McCardie J in Lebeaupin v Clispin and Companlr stated;'This phrase'force majeure has been introduced intomany English commercial contracts within recent years.It is employed not only with increasing frequency, butwithout any attempt to define its meaning or any effortto co-ordinate the phrase to the other provisions dfdocuments'.

Clause 23(a) of the Joint Contracts Tdbunal's standardform of building contract (1963 edition) states;

'Upon it becoming reasonably apparent that the progressof the works is delayed, the Contractor shall forthwithgive wdtten notice of the cause of the delay to theArchitect, and if in the opinion of the Architect thecompletion of the works is likely to be, or has beendelayed beyond the date for completion stated in theappendix to these Conditions or beyond any extendedtime previously fixed under either this clause or clause33(1) (c) of these conditions, (a) by force majeure,.......then the Architect shall as soon as he is able to estimatethe length of the delay beyond the date or time aforesaidmake in writing a fair and reasonable extension of timefor completion of the works. Provided always that theContractor shall use constantly his best endeavours toprevent delay and shall do all that may reasonably berequired to the satisfaction of the Architect to proceedwith the works'.

INTRODUCTION

The case o_f Yrazu and Another v The Asbal ShippingCompany' appears to be the first reported case concerningforce majeure. Unfortunately, no reference is made in thiscase to the reason for its inclusion.

Force majeure clauses were introduced into Englishcommercial contracts at the end of the nineteenth andbeginning of the twentieth centuries and this is supportedby McCardie J in Z ebeaupin v Richard Lrispin and &mpany

'This phrase 'force majeure' has been introduced intorpany English commercial contracts within recent years',

and bv:

(")

(b)

The Grain and Feed Trade Association who state thata force majeure clause has been included in theircontracts for the last eighty yean. (See Appendix I)The National Federation of Building Trades Employerswho have traced its inclusion in the Joint ContractsTribunal's (JCT) standard form of building contract(known then and for some time after as the RoyalInstitute of British Architects form of contract)back to 1909.

English statutes have also included force majeure and similarclauses, namely the Emplqyment ofwomen, Young Personsand Childrens Act (1920)r and the Hours of Employment(Conventions) Act 1936q.

In considering the reason for its introduction it is pertinentto turn to lhe czse of Bhckburn Bobbin Company Limitedv T ll Allen and Sons Limitecl5 which summarises theEnglish law of contract in the early part of the twentiethcentury. Parts of McCardie J'sjudgement are as follows;

'The original rule of English law was clerir in itsinsistence that where a party by his own contractcreates a duty or charge upon himself he is bound tomake it good notwithstanding any accident byinevitable necessity, because he might have providedagainst it by his contract;see per curiam Paradine vJaneb . That principle was applied with full severityduring the eighteenth century . . . . . . . . . The firsttrue modification of the original rule was created, Ithinl, by the doctrine of commercial frustration'.

The next true modification of the original rule was finallyeffected by the decision in Taybr v. Caldwellt . There thecontract was held dissolved by the destruction of its-subjectmatter. The doclrlne of Tayl.or v Caldwell was exletded byNicholl and Knight v Ashton Edridge and Company6 andstill more strikingly enlarged bv the Coronation cases ofwhich Krell v Henry 9 is the mo st vivid e xample . ln Krell vHenry the court held that although a collateral wasimportant, circumstance was the basis of the contractbetween the parties, and that when the basis ceased itfollowed that the contract was dissolved'.

I (1920) 1 KB114 at page 719.z1 l e04) 20 TLR 1533Schedule Pt.11 Article 4 'The provision of Articles 2 and 3 (regarding prohibition of the right to work) shall not apply tothe nightwork of young persons between the ages of 16 and 18 years in cases of emergencies which could not have beencontrolled or tbreseen, which are not of a periodical character, and which interfere with the normal working of the industri"alundertaking'.4schedule Pt.l I Article 3 'The Limits of hours prescribed in paras 2, 3 and 4 of Article 2 (ie working hours) may be exceededand the interval prescribed in para 5 (ie rest period) reduced, but only so far as may be necessary to avoid serious interferencewith the ordinary working of the undertaking.a) In the case of accident, actual or threatened, or in the case of urgent work to be done to machinery or plant, or in thecase of'force majuere', orb) In order to make good the unforeseen absence of one or more members of a shift'.5 (1918) I KB 540e(1647) Aleyt 267 ( 1 8 6 3 ) B & S 8 2 6 .8( 1901) 2 KB 1269( 1903) 2 KB 740. The contract was to hire rooms on Pall Mall to view the Cofonation processions of Edward V I 1. On June20th Henry agreed in writing to pay f,75 for the hire of the rooms for two days, paying f,25 in advance. The writing did notmention the procession.The procession did not take place due to the King's illness, and Henry refused to pay the f50, and therefore, Krell took actionfor this amount. The Court of Appeal held that both parties regarded the taking place of the procession as the foundation ofthe contract.

This was the situation at the outbreak of the FiISt WorldWar. At this time tlGre wer€ a vast number of commercialcontracts which contained no clauses what€ver providingfcr that event. These were obviously based on theassumption that peace would continue, neither partycontemplating war.10The difficulty encountered by the courts was to decide towhich circumstances the exception of Krell v Henry colldbe applied;

'I desire respectfully to add that in my opinion the Krellv Henry rule should not be unduly extended. It is onlyin exceptional cases that it can be safely applied'.

It is submitted that it is against the background of the stricttule of Paradine v fane, with the very limited exceptions ofthe extended rule of Krell v Henry, that such clauses asforce majeure were introduced into English commercialcontracts. Without them, the seller generally would be inbreach ofhis contract with the buyer.A closer examination of the doctrine of frustrationamplifies this situation, one in which certainty and justicemay be seen to conflict.This doctrine operates in three main situations;(a) Where there is supervening illegality between the

time of making and the time of completing thecontract.

(b) Where the performance ofthe contract has becomeimpossible through the destruction of the subjectmatter, through the death of a party in the case ofa contract of se ice, and through temporary non-availability.

(c) Where later events destroy some basic assumption onwhich the parties have contracted.

The doctrine,of frustration has relaxed the strict commonIaw of Paradine v Jane lhat a corLtracl is made to beperformed.On examination of the above exceptions, it can be seen thatthere may be an overlap with those reasons which may becovercd by the concept offorce majeurc. For example, inDenny, Mott and Dickinson Limited v Fraser (James B ) andCo. Limitedll the contract was held to be frustrated by theCofltrol of Timber (No. 4) Order 1939 which made tradingin timber illegal.In compadson, in tghtm and Staines Electricity CompanyLimited v Eghem Urban District Councl12, it was held thata Lighting Order of 1939 making the display of street lightsunlawful was due to an unavoidable cause within themeaning of the force majeure clause.Why then are force majeure clauses introduced intocontracts, when the occurrence may have been covered bythe common law doctrine of frustration? There are twopossible reasons,Firstly, courts are now very reluctant to hold that acontract has been frustrated13. This is supported by thefact that since the passing of the law Reform (FrustratedContracts) Act (1943) no cases of frustrution have beenupheld by the courts.Secondly, is the effect of a frustrating circumstancecompared with the effect of one reason of force majeure.At common law the frustrating event brings the contract toan end forthwith, but the contract is not void ab initio.Thus at common law, dghts accrued before the event remainenforceable, but rights not yet accrued are unenforceable.These rules have been modified by Section 1 ofthe IrwReform (Fruslrated Conlracts) Act (1943)14.

l0Blackburn Bobbin & Co. Ltd. v T 14 Allen & Sons Ltcl (1918) 1 KB 540. 'But it cannot be that all such comracrs weredissolved by the events of August, 1914. The mere continuance ofpeace was not a condition of the contract. . .. . . Thedestruction of a state of peace is not of itself a destruction of any specific set of facts within D/e// v Henry rule. Nor can it bethat grave difficulty on the part of a vendor in procurring the contract articles will excuse him from the performance ofhisbargain. If such were the case, then the decision of the House of Lords in Tenants (Lancashbe)v llilnn & Company (1917)A.C.495 with respect to the force majeure clause there in question would have been unnecessary, for the contract wouldhave been dissolved by the basic change of circumstances and the principle of Metropolitan llater Board v Dick Kerr andCompany (1918) A.C. 119 would have applied'.11(1944) AC 265t2( r944) AER 10713(1956) AC 696. Lord Radcliffe's judgemett in Davis Contrsctors Ltd v Farcham UDC.14'Sl (i) Where a contract governed by English law has become impossible of performance or been otherwise frustrated, andthe parties thereto have for tlnt reason been discharged from the further performance of the contract, the following provisionsof this section shall, subject to the provisions of section two of this Act, have effect in relation thereto.Sl(ii) All sums paid or payable to any pady in pursuance of the contmct befoJe the time when the parties were so discharged(in this Act referred to as 'the time of discharge') slnll, in the case of sums so paid, be recoverable fiom him as moneyreceived by him for the use of the party by whom the sums were paid, and, in the case of sums so payable, cease to be sopayable:Provided that, if the party to whom the sums were so paid or payable incurred expenses before the time of discharge in, or forthe purpose of, the performance of the contract, the court may, if it considers it just to do so having regard to all thecircumstances of the case, allow him to retain or, as the case may be, recover the whole or any palt of the sums so paid orpayable, not being an amount in excess of the expenses so incuned.S1(iii) Whete any party to the contract has, by reason of anything done by any other party thereto in, or for the purpose of,the performance of the contract, obtained a valuable benefit (other than a payment of money to which the last foregoingsubsection applies) before the time of discharge, there shall be rqcoverable from him the said other party such sum (if any),not exceeding the value of the said benefit to the party obtaining it, as the court considers just, having regard to all thecircumstances of the case and, in particular, -(a) the amount of any expenses incurred before the time of discharge by the benefitted party in, or for the purpose of, theperformance of the contract, including any sums paid or payable by him to any other party in pursuance of the contract andretained or recoverable by that party under the last foregoing section, and(b) the effect, in relation to the said benefit, of the circumstances giving rise to the frustration of the contract.

8

However, where the circumstance is one of force majeure;the resultant effect of this circumstance depends on thewording of the contract in which it is included.In many commercial contracts, it is both in the interests ofthe buyer and the seller that the contract be fulfilled, albeitdelayed by reason of force majeurerJ.Thus it can be seenlr that the force majeure clause operatesto keep the contract alive, albeit in cedain cases for alimited period. This may favour either the buyer or theseller, or both.In the case of a building contract, it makes senseeconomically to keep the contract alive. For, if the delayingoccurrence would have constituted a frustrating event andthere was no force majeure claus€, then the buyer (client)would have to seek an altemative seller (builder) tocomplete the works. This would cost him more money, andit is likely that the delaying event would effect the newbuilder in a similar way as it affected the original builder.Thus the client would be no better off.Alternatively, if the delaying occurrence would not haveconstituted a frustrating event, then the builder would,without the force majeure cla[se, have been in breach ofcontract by not completing on time. The client would,therefore, have to seek damages against the builder.Because of the force majeure clause, the contmct is neitherfrustrated nor breached.

An extension of time should be granted covering the timeof the delay, but with no monies being payable to eitherthe client or the builder: each side, therefore, bears itsown costs. Thus, at worst, a force majeure clause protectsthe party who otherwise would haYe been in default andtherefore liable, and at best keeps the contract alive whichmay otherwise have been breached, or possibly in cases offrustration. dissolved.This is supported in t]ne case of FairclDugh, Dodd and lonesLimited i i. H. vantol Limitedl6 .

A DEFINITION OF FORCE MAJEURE

It Thonas Borthwick (Glasgow) Limited v Fauvre andFairclough Limited, per Donaldson J.17

'The precise meaning of this term (that is. force majeure)has eluded the lawyers for years. Commercial menhave no doubt as to its meaning. Unfortunately, no twocommercial men can be found to agree upon the samemeaning, so perhaps in this as in so many other mattersthere is very little difference between the commercialand legal fraternity'.

A complete definition of force majeure cannot be given,therefore, because of the reasons given in the case aboveand as will be shown below, it will vary according to thecontext in which it is written.l8Further variations to the meaning of force majeure indifferent contexts will operate by the application of theejusdem generis rule which will generally limit its use.

These variations and limitations will be examined later.

What definition, therefore, can be put on force mdjeure?To investigate this learned texts and case law are reviewedto determine what events are covered by force majeure,At the end, a definition will put forward, solely in thecontext of clause 23(a) of the JCT standard form ofbuilding contract.Before pursuing a definition further, three terms needto be distinguished, these are: acts of God, vis major andforce majeure.It will be seen that the circumstances covered by the termforce majeure generally include the other two terms;however, acts of God and vis major may not include allcircumstances generally covered by force majeure.Contracts, especially older ones, sometimes included vlsmajor provisions, and more frequently, acts of God clauses,and therefore it is necessary to distinguish betweencircumstances included by these two terms and thosecovered by the force majeure concept.19

i5In the British Paper and Board Trade Customs, the force majeure clause allows for suspension of the contract. Where thedelay ends within one month after the stipulated delivery date, then the contract shall recommence. However, delay of longerthan one month allows either party to cancel the portion of the contract affected by delay. Thus both parties are offeredprotection under this clause. (See Appendix II).Clause 23 of the Joint Contracts Tribunal standard form of Building Contract allows for extensions of time to the contractperiod due to reasons of force majeure.Clause 21 ofThe Grain and Feed Trude Association General Contract No. I provides for extensions of time to the shippingpeiiod of one month due to the occurrence of force majeure after which the buyer has an option to cancel, and if he doesnot take up the option, then the period is further extended by one month. If the shipment is then still prevented, then thecontract shall be considered void.It is interesting to note that although this clause favours the seller, it gives the buyer certain advantages. He has the option tocancel, but more important, during the option period he can watch the market and only exercise the option to cancel if themark€t goes against him;for example a fall in the price in the commodity he is buying.16(1955) I WLR 1302 Parker LI in the Court of Appeal did not define 'force majeure' but merely stated the function of itand when it operates; 'Whether viewed as a clause which extends the time for shipment or as an exception clause, it is aclause which operates to prevent what otherwise might be a breach from being a breach. Such a clause would normally, at anyrate, not be construed as being operative, unless in its absence, the party protected would have been in breach.'17(1968) 1 Lloyd Report 16. page 28.lSBritish Electricsl snd Associated Industries v Pqtle! Pressings Ltd. (1953) 1 WLR 280. 'For example, a term of a contract'the usual force majeure clauses to apply'has been void for uncertainty'.lgMatsoukis v Priestmnn and Company (1915) I KB 681 per Bailhache J. 'A1 the same time I cannot accept the argumentthat the words (force majeure) are interchangeable with vis major or act of God. I am not going to attempt to give anydefinition of the words force majeure, but I am quite satisfied that I ought to give them more extensive meaning than actof God or vis major. The difficulty is to say how much more extensive'.

ACT OF GOD

An act of God excuses a party under a contract frodlliability which that party would otherltise incurred.20Halsburys Laws defines act of God as;

'An extraordinary occurrence or circumstance whichcould not have been foreseen and which could not havebeen guarded against, or, more accurately, as an accidentdue to natural causes, directly and exclusively withouthuman intervention, and which could not have beenavoided by any amount of foresight and pains and carereasonably to be expected of the person sought to bemade liable for it, or who seeks to excuse himself onthe ground of it. The occurrence need not be unique,nor need it be one that happens for the first time, it isenough that it is extraordinary, and such as could notreasonably be anticipated, The mere fact that aphenomenon has happened once, when it does notcarry with it or import any probabil ity of a recurrence(when in other words, it does not imply any law fromwhich its recurrence can be inferred) does not preventthat phenomenon from being an act of God. It must,however, be something overwhelming and not merelyan ordinary accidental ctcumstance and it must notarise from the act of man'.

Thus, an act of God is something totally beyond the powers ofof human control. It must also be something which isextraordinary2l , outside the scope of usual or normaloccurrences, which could not have been reasonablyforeseen, prevented or guarded against.22The occurrence need not be the fust time.23Examples of occurrences held to be an act of God are asfollows:a. Accidentb. Storm and tempestc. Earthquakes and other convulsions of natured. Extraordinary flood or tide

e. Lightningf. Unprecedentedrainfallg. Fire caused by lightning

h. Extraordinary frosti. Extraordinary snowfallj. Deathk. LunacyExamples of occurrences held not to constitute an act ofGod are;a. Fogb. Ordinary fall of snowc. Fire not caused by lightningd. Gnawing by rats of a hole in a pipe of a ship throughwhich sea water came in damaging cargo.

Vis majorThe Dictionary of English Law defines vis major as'such aforce as it is practically impossible to resist, eg a storm, anearthquake, the acts of a large body of men, etc. Thedoctrine ofvis major is that a person is not liable fordamage if it was directly caused by vis major. Vis majorincludes many things described as the act of God.'Thus, the difference between act of God and vis major isthat act of God is an event or accident due to naturalcauses, directly and exclusively without human intervention,whereas vis major is an irresistable force, which may or maynot be with human intervention.24Pdma facie, therefore, there may be little distinctionbetween vis major and force majeure,

Force majeureThe first case law on this subject appeared at the beginningof the 20th century.25

2lRiver Wear Commissbn rt lUilliam Adamson and others. (1877) 2 AC 743 per Lord Cairns LC. 'If a duty is cast upon anindividual by common law, the act of God will excuse him from the performance of that duty. No man is compelled to dothat which is impossible'.2loakley I The Portsmouth and Ryde Stam Packet Co. (1856) l1 Exch.618 per Martin B.'The Act ofGod meanssomething oyerwhelming and not merely an accidental circumstance'.22Pandorf v Hay'niltor (1886) 17 QBD 670 per l,ord Esher MR'I shall not now enter into a discussion which at one time wasrather rife, as to what $r'as the exact meaning of the term of'act of God'. In the older, simpler days I have myself never hadany doubt but thafit did not mean the act of God in the ecclesiastical and biblical sense, according to which almosteverything is said to be the act of God, but that in a mercantile sense it meant an extraordinary circumstance which could notbe foreseen, and which could not be guarded against'.The proof required regarding the amount of protection which the person relying on an act of God clause must afford was seenh Nugent v Smithby Mellish.'Ll at page 441; 'I think, however, that in order to prove that the cause of the loss was irresistible,it is not necessary to prove that it was absolutely impossible for the carrier to prevent it, but that it is sufficient to prove thatby no reasonable precaution under the circumstances could it have been prevented.per Cockburn C J 'In other words, all that can be required of the carrier is that he shall do all that is reasonably andpractically possible to insure the safety of the goods. If he uses all the known means to which prudent and experiencedcarriers ordinarily have recourse, he does all that can be reasonably required of him; and if, under such circumstances, he isoverpowered by storm or other natural agency, he is within the rule which gives immunity from the effects of such vis majoras the act of Cod'.23Nitro-Phosphate and Oclhams Chemical.Manure Co v London & St. Katherine Docks Co. (1878) 9 ChD 503 per Fry J 'I donot think that the mere fact that a phenomenon has happened once, when it does not cafiy with it or import any probabilityof a recurrence : when, i6 other words, it does not imply any law from which its recurence can be inferred - places thatphenomenon out of the operation of the rule of law with regard to the act of God. In order that the phenomenon should fallwithin that rule is not . . . . necessary that it should be unique, that it should happen for the first time;it is enough that i1 isextraordinary and such as could not reasonably be antiiipated. . . . To say that a thing could not reasonably have beenanticipated iS to say that it is the act of Cod'.24 Simmons v Noitb, (1831) 7 Bing 640. In this case which decided that vis major includes act of God and Queen's enemies,Tundall C J stated 'Here, if the surface of the meadow had been destroyed by the erruption of a moss, or enemies had landedand dug it up, that would have been no waste, but'the act ofGod, or ofa hostile force, that vis major for which the defendantis not resoonsible'.25Yrazu snd Anothbr v The Astal Shippr'ng Co. (1904) TLR 153.'t0

The leading case, if only that it summadses some eventswhich may fa l l into tle concept of force maieure. isLebeaupin v Richard Oispin and Complfljtzo whereMcCardie J'approves' the statement (rather than definition)of Goirond2T which is as follows;

'force majeure. This term is used with reference to allcircumstances independent of the will of man, and whichit is not in his power to control, and such force majeureis sufficient to justify the non execution of a contractThus war, inundations, epidemics, are cases of forcemajeure;it has even been decided that a strike of work'men constitutes a case of force maieure'.

McCardie J said of this starement28;'This is a wide deflnition, but I think that it usefully,though loosely suggests not only the phrase as used onthe Continent, but also the meaning of the phrase asoften employed in English contracts'.

There is one comment to make on Goirond's definition Hestates that force majeure applies to events independent of

the will ofman- This at first suggests 'acts of God'. However,he includes in his definition, wars and strikes. Thesesituations are certainly not independent of the will of man29,they are man made.Goirond's definition can be distinguished, and this issupported by subsequent cases26, in that the term forcemajeure can be us€d with reference to circumstancesindependant to the will ofthe padies to the contract, andwhich is not in their power to control,Those cfucumstances held to be by reason of force majeurewill now be examined.(a) Direct legislative or administrative interferencein Lebeaupin v Clispin,McCardie J26 gave numerousexamples of what he coosidered to be force majeure;

'Any direct legislative or adminislrative interferencewould, of course, come within the term;for example,an embargo'.

A further case regarding govemment interference, which ismore informative, is that of C Czamikow Limited v CentrdhHandlu Zsgranicznego 'Rolimpex'30 Lord Denning examinedtwo situations:

(t) Where neither of the contracting parties was thegovernment department concemed;

(ii) Where the defaulting pady was the govemment orgovernment department,

Lord Denning held that in this case, neither of the partieswas the govemment or government department, and heldthat the failure to supply the sugar was outside the seller'scont ro l .3o ,3 lHowever, he stated obiter32 that if the seller was held to bea department of the govemment, then it could not replyupon the clause.(b) Act of ParliamentOne step further from govenment interference is legislativeeffects.In the case of Egham and Staines Electricity CompanyLimited v Egham Urban District Councilr3 there weret}lree contracts where the appellant company agreed tosupply electricity to the respondent council for streetlighting purposes, subject to clause 15.34

Everything went smoothly until the outbreak of war, andthe Lighting (Restrictions) Order 1939, the Lighting(Restrictions) Order (No. 2) 1939, and the Lighting(Restrictions ) Order 1940, made the display ofl ights int}le streets unlawful, The respondent council thereforeceased to consume the greater proportion of the current,hitherto supplied by the appellant and thereforce reducedhis payment.It was held that the inability of the company to light thelamps was due to an unavoidable cause (ie lighting orders)within the meaning ofthe force majeure clause.35

26rL920) 2KB 715.27 doniOND French commercial law, 2nd edition. p854.

'28Lebeaupin v Oispin. Q92A) 2KB 715. Mccardie J stated 'That learned Judge' (ie Bailhache J i1 Matsoukis v Priestnan)'was, if I may respectfully say so, clearly right when he said that the phrase 'force majeure' was not interchangeable with'vis major' or 'the act of Cod'. It goes beyond the latter phrases'.

2gDuncan Wallace, I.N. Hudson's building contracts. loth edition, p.359. 'Force majeure . . . . . i t covers a wider class of events

than act of God'.30(1978) I AER 81.31Ibid p9l.'I cannot think they should be made liable in that situation, when there was absolutely nothing they could do.

They had done everything thatihe contract required them to do. It was only the ban, that is the 'government interyention'

which prevented the shipment. It was a clear case of force majeure'.32Ibid. p89.33(1944) 1 AER 107.34lbid. 'L,astly it is hereby agreed that no default by the company under this agreement shall render the company liable in

damages if and so far as such default shall arise or be occasioned by reason of fire, frost, accident, strikes, lockouts, a

comblnadon ofworkmen or from any other unavoidable cause over which the company has no control. Provided always that

all payments under this agreement by the council shall abate in the same proportion as the supply shall be curtailed by reason

of any event provided for in this clause'.35This case is further supported by case law where parties to contracts not containing force majeure, or similar clauses were

held not to be in breach where they have acted according to an Act of Parliament, enacted subsequent 10 the making of the

contract. This was s o held in Baily tt de Oespign! (1869) L R 4 Q B 180; on the principle ofthe maxim'lex non cogit ad

impossibilia. (ie the law does not recognise impossible things). In this case The l-ondon, Brighton and South Coast Railway '

(new lines) Ait (1862) gave a railway company power to compulsorily purchase from the defendant and build upon land

which the defendant covenanted not to build on. The defendant covenantor was held not to be liable to the plaintiff

covenantee for breach of covenant

1 1

(c) Breakdown of machineryln Matsoikis v Priestman the co.ntrcct provided for theconstruction of a boat to be delivered on or before the28th February, 1913, subject to a force majeure clause.36The construction of the boat was delayed for several reasons,one of which was due.to a breakdown ofmachinery,Bailhache J considered that this came within the words forcemajeure as force majeure cedainly covered accidents tomachinery.This begs the question ofwhether force majeure wouldcover breakdown of machinery due to lack ofmaintenance,that is self-induced breakdown, or even 'fair, wear and tea/?It is inevitable that machinery will break down at some timeduring its working life, whether it is maintained or not. Asargued by the counsel for the plaintiff3T

'Breakdown of machinery does not come within thewords force majeure. A breakdown ofmachinery is ausual occurrence and must have been taken into accountby the defendants in considering the length of time theywould require for the building of the steamer'.

It seems that this decision of Bailhache J must be strictlylimited to breakdowns caused by accident. Unfortunately,the facts of the case do not assist as they do not state thecause of the accident which made the machinery breakdown.(d) Accident or casualtyThis is a continuation from the reason of breakdown ofmachinery through accident.These events, which would have been held to fall withinthe meaning of force majeure are cited from the case ofYrazu and Another v The Astral Shipping Company3Swhich included a force majeure clause.39The vessel called in at a port because the mastermiscalculated the quantity of coal which was needed tocomplete the journey, thus delaying the journey andcausing a deterioration in livestock. It was held by WaltonJ that an accident or casualty would amount to force majeure.However, running short of coal due to the master's mistakedid not amount to an accident because'the ship and cargowere never in any actual and immediate danger', and wasnol. therefore. force majeure.Walton J gave an example of accident;

'If the deficiency of coals had arisen from some accident,if for example, it had been necessary to jettison coals, Ithink it would have been a case of force majeure withinthe meaning of the clause'.

The reason of'casualty' was also included in Goirond'sdefinition40;

' . . . . thus . . . . ep idemics , a re causes o f fo rce majeure . . . 'which was approved by McCardie J in I ebeaupin v Cispin

(e) Extraordinary bad weatherIn Matsoukis v Priestman, another rcason for the delay wasbad weather. Bailhache J41 held that;

'The term force majeure, cannot, however, in any view,be extended to cover bad weather . , . .These are the usual incidents interrupting work, and thedefendants, in making their contract, no doubt tookthem into account',

Unfortunat€ly, the facts given in the case do not state howbad the weather was nor what type of bad weather it was.This distinction was made by McCardie J in Lebeaupin vCrisoin42

'In the Matsoukis case Bailhache J seemed to have ruledthat delay caused by bad weather was not within theforce majeure clause. But he was there dealing with theparticular facts, and I conceive that normal bad weatheris one thing, whereas abnormal tempest, storm or thelike, may be another thing and might well fall within theforce majeure clause'.

Therefore, it is considered that exceptionally bad weathermay fall within the words force majeure. This is alsosupported by the section covering the act of God. In thatcase, storm, tempest, an extraordinary fall of snow, and anextraordinary frost werc all held to be acts of God. As forcemajeure is deemed to be wider than act of God, suchcircumstances should, therefore, fall within the meaningof force majeure.

(f) Seizure of a shipIn the Turul43 upon the outbreak of war, an enemy shipwas seized in the port of New South Wales, her charts andpapers removed and a watchman placed on board. Afterthis seizure, a proclamation was made granting €nemy shipsa period in which to depart. The master of the ship was notinformed by the proclamation, or otherwise, that upon hisapplying for a pass the ship would be put in a position toceparr.The Privy Council held that the ship was unable to leave'by circumstances beyond its control' (force majeure)within the meaning of article 2 of the sixth HagueConvention.44

. !

36'If the said steamer is not delivered entirely ready to purchaser at the above mentioned time, the builders hereby agree topay to the purchaser for liquidated damages, and not by way of a penalty, the sum of fl0 sterling for each day of delay inthe deduction of the price stipulated in this contract, being excepted only in the case of force majeure, and/or strikes ofworkmen of the building yard where the vessel is being built, or the workshops where the machinery is being made, or atthe works where steel is being manufactured for the steamer or any works of any sub-contractors'.3 7 ( 1 9 1 5 ) I K B 6 8 1 .3 8Duncan Wallace in Hudson's building contracts, 1Oth edition.39lbid 'The vessel has liberty to deviate for the purpose of saving life or property, but not to call at aoy port or ports beforelanding her livestock except in the case of force majeure'.40GOIROND. French commercial law. 2nd edition.4 l (1915) 1 KB 681 p68742( 1920\ 2 KB 7 194 3 ( 1 9 1 9 ) A C 5 1 544'Par suite de circonstances de force majeure, n'aurait pu quitter le port enemi pendant le de lai vise a l'article precedent'(i.e. whether the ship because of reasons of force majeure could not have left the enemy port dudng the period mentioned inthe preceding article).

(g) General dislocafion of the supplier's qusinessThe main reason foi:the delay in the case Matsoukis vPreistman was l]r.e 1912 universal coal stdke. The workswhere the defendant obtained its materials for other shipsit was building fell behind. As a result, the ship to be builtbefore the plaintiffs occupied the berth that was intendedto be occupied by the plaintiffs drip much longer than itotherwise would have done, and consequently, the plaintiffsboat was late in being laid down, and th€refore late indelivery.Bailhache J4s held that this delay did fall within thereasonable meaning of force majeure.(h) WarMany commercial contracts today contain their ownprovision against the outbreak of war, However, one case inwhich a force majeure clause was included but a warprovision did nol exist was in Zinc Corporotion v Hirsch46War broke out, and the seller claimed suspension of thecontract.On the question of whether the force majeure clause 17included war, per Swifen Eady L J47;

'The term force majeure as used on the Continent ofEurope includes war; Calvo Dictionnaire de DroitInternational, force majeure ; Dalloz JuispuidenceGenerale, tome 24 page 755 article 'force majeure'Goirond's French Commercial law, 2nd edition page834. Whether the expression has the same meaning inthis contract is another matter. but war is a causebeyond the control of either party preventing ordelaying the carrying out of the agreement'.

It is considered, therefore, that war, unless expresslyexcluded or included for elsewhere in the contract, would becovered by the words force majeure. This is endorsed byGoirond's48 definition approved by McCardie J inLebequpin v Crispin49

45 :It was not, however, the direct operation ofthis st ke which caused the damage. What did cause the damage was thegeneral dislocation of the defendant's business and the business of the manufacturers of steel plates, etc. in the north, and inthose cfucumstances, I think I amjustified in saying that did constitute a case of force majeure. Of course, if I were to give thewords the full meaning attributed to them by the Belgian lawyer there would be no doubt about the matter, but giving thema more restricted meaning I think that the complete dislocation of business in the north of England as a consequence of theuniversal coal strike, which operated directly on the ship in turn for building previously to the plaintiffs steamer, and onlyindirectly on the plaintiffs steamer, did come within the reasonable meaning of the words force majeure'.46(1916) 1 KB 541 Clause l7 of the contract provided 'In the event of (inter alia) any sttike, suspension of labour, floods,fire, stoppage of water supply, act of God, force majeure, ot any cause beyond the control of either the seller or the buyerpreventing or delaying the carrying out of the contract 'then this agreement shall be suspended during the continuance of anyand every such disability.47(1e16) l KB 541 p554a8 GOIROND. French commercial law. 2nd edition.4e( 19 201 2 KB 7 t9so'GOIROND. French commercial law. 2nd edition.sr( 1920\ 2 KB 7 1952(1922) 1 KB 431

53Under the Hackaey Electric Lighting Order (1893), the council were bound to give a supply of energy to premises in their

district, subject to clause 26 which provided; 'Whenever the undertakers make default in supplying energy to any owner or

occupier of premises to whom tiey may be and are required to supply energy under this Order they shall be liable to a penalty

not &ceeding forty shillings in respect of every such default for each day on which any such default occurs . . . provided . . .

that in no cale shail any penalty b; inflicted in respect of any default if the court . . . shall be of opinion that such default

was caused by inevitable accident or force majeure . . .'Two of the iouncil's workmen refused to do the work required, because the wiring of Dore's house had been carried out by

a man who was not a member of a trade union; that if the council had dismissed these men the result would probably have

been that the Electrical Trades Union would have caused all their members in the council's service to terminate their

engag€ments; that if this had occurred it would have been difficult for the council to get other competent workmen; and that

any interference with the council's undertaking by the withdrawal of their workmen would have seriously affected the whole

district. The council contended that they were not liable for the penalty under clause 26, as any default on their part was

caused by circumstances amounting to force majeure.At the fiist hearing the Magistrate held that the meaning of force majeure applied only to physical or material constraint and

that although it had been held that the expr€ssion applied to stdkes actually proceeding, to war, and to breakdown of

machinery, it had never been held to apply to fear, however reasonable, of the oonsequences of threalened actioo.5a(1960) AC 684 p690 (Privy Council)

'Thus war., - . . are cases offorce majeure'(i) StrikesAgain, Goirond's definition50 of force majeure approvedby McCardie J in Z ebe(rupin v Oispinsr, included strikesas a reasonl

'. . . . . it has even been decided that a strike of workmenconstitutes a case of force majeure'.

It washeld, it Hackney Borough Codncil v DoreS2 that astrike would, if the circumstances allowed (ie there were notconstraints such as the ejusdem generis doctrine), amount toforce rnajeure, but that reasonable apprehension of a strikedid not amount, in itself, to force majeure.53There are several evenis held by the courts not to fall underthe words of force majeure. These are as follows:

(r) Events which are within the confol of the partyrelying on force majeure.ln Hong-Guan and Company Limitecl v R lumabhoyqnd Sons Limited Der [,ord Morris of Borth-v-Cesl54'So far as the clause deals with force maj6ure it

appears to be designed to protect the respondentsfrom liability in the event of their being preventedfrom performing the contract by circumstancesbeyond their control'.

(ii) Thos€ events which are common or usual events whichcan be expected to occur in industrySuch circumstances as employees attending thefuneral of their shipyard manager, and employeesattending football matches were held not to be byreason of force maj eute tr Matsoukis v Priestnanbecause as stated by Bailhache J.

'These are usual incidents interrupting work, andthe defendants, in making their contract, nodoubt took them into account'.

I

t \ t

(iii) Events which the parties are, or should be aware of

Drior to. or at the time of making the contract

inlohn Batt and Company (I'Qndon ) Limited v

Brooker, Dore and Company Limited, per Atkinson

J55;' . . . . it seems to me perfectly plain that the

clause (ie foice majeure) did apply and thatperformance was quite impossible from causesover which the seller had no control, and I can

see no justification whatsoever, for the

suggestion that they cannot rely upon thesecauses because they ought to have anticipatedthem and foreseen them'.

Atkinson J, however, said that he would have taken

the opposite view if there was evidence that theseller ought to have anticipated the incidents.However, this may be limited by the strict wordsof the contract,Prima facie, events which the party is, or shouldbe aware at the time of contract cannot be pleaded

as force majeure. However, if as in Readon Smith

Line v Minister of Agriculture16 , it car, be shownthat both parties were aware of the fact, and the

intention was that the event could be relied upon

as falling within the meaning of force majewe,then it shall so be.

(iv) Price increaseAl increase in price of the commodity being sold,

o r in the method o f t ranspor ta t ion or any o therassociated increase will not come within the

meaning of force majeure'The reason for this is that the contract is still

capable of being performed albeit at a higher pice

to the seller.In the case of Tenants ( Lancashire ) Limited v C' S.

llilson and CompanyS? I-ord loreburn held58;'By hindering delivery is meant interposingobstacles which it would be really difficultto overcome. I do not consider that even agreat rise of prices hinders delivery. If that hadbeen intended different language would havebeen used, and I cannot regard shortage of cash

or inabil ity to buy al a remunerative price as a

contingency beyond the sellers control' The

argument that a man becomes excused fromperformance of his contract when it becomes'commercially' impossible . , . . seems to be adangerous contention, which ought not beadmitted unless the parties have plainlycontracted lo I hal efl 'ect"

This is also the implication from the case of Buntenand Lancaster Limited v Wiltshire Quality hoducts'9Limited 59 dnd Brauer and Compsny v James Clark pet

Sellers J6o'. . . the sellers admitted . . . that they could haveshipped, declared and tendered the contract

goods within the contractual date if they(themselves) had paid the minimum price. Onthis admission, the sellers cannot, in my opinion,rely on force majeure. There is no prohibition,no physical or legal prevention. The goodscould, therefore, have been exported'.

(vi) Failure of the subject matter when other suppliersare availableln Bunten and Ldncsster v Wilts Quality hoductsLimited, the seller failed to supply kerasundhazelnut kernels as contracted for, The contract

c contained a force majeure clause.61The seller claimed tlnt he was entitled to cancelthe contract by reason of force majeure, becausethe annual crop produced was approximately onethird below the average annual production, whichresulted in a price increase.It was held per McNair J62;

'It is quite clear on the evidence that there wasnot the slightest difficulty for any buyer in theautumn of 1950 (at the material time of deliyeryunder this contract) to buy goods of the contractdescription provided he was prepared to pay themarket price for them. There is nothing tosuggest to me that there is anything abnormalin the market fluctuations that took place in thiscase. I therefore am quite unable to infer thatthe sellers' reason for failing to deliver was failureof crop, or force majeure, or any matter of thatkind'.

The circumstances examined above illustratethose eventswhich the courts have beemed force majeure clauses tocover, and also those which do not constitute force majeure.Two overriding facton may be added to this;Firstly, although one or other of the above events mayoccur, it does not necessarily mean that the force majeureprovision will operate. For example, it may be possible tofulfill the contractual obligations in some other way, despitethe fact that the event has occuned. In other words, in orderfor such a plea to be successful, tlte contract must beimpossible to carry out due to this event.This was highlighte d in Hackney Borough Council v Dorcper Branson J63

'In my view force majeure cannot be established byshowing that the consequences of doing the act whichwould be suffered by the person dying upon theclause would be unpleasant, tuoublesome or perhapsdisastrous. In order to succeed, the appellants mustshow that what the statute ordered them to do hasbecome impossible;it is not enough for them to s4vthat it has become inconvenient or unpleasant for themto do it ' .

The second factor leads directly from the first, namely thatthe party relying on the clause must do all that is reasonablypossible to prevent the delay from occurdng.

ss(1942) Lloyds List L R Vol 72, 149,p157s6(t962) 2 AER 577s1(1917) AC 49s58Ib id p510se(1951) 2 Lloyds Rcp 3060(19s2) 2 AER 497611- 'This contract is subject to the usual force majeure clauses of this country and of the country of origin of the goods.

2. Notwithstanding anithing aheady stated in this contract sellers reserue the right to delay delivery or shipment and/br

cancel without claim on either side thi unshipped and/or undelivered portion of this contract in the event of their seller,failing to ship or deliver on account of stdke;, civil commotions, war, civil war, failure of crops, force majeure etc,, and/or

contdbutory causes.62(1951) 2 Loyds Rep 3263(1922) 1. KB 431 p438

1 4

This is established in the case concerning act of God, namelyNugent v Smith64 .There is one miscellaneous point regarding contractsincluding a force majeure clause which is of interest.A force majeure clause, on its proper construction may allowthe court to take account of the promisor's obligationsunder other contracts despite the fact that, as a rule, it isno excuse that contacts with third parties prevent thefulfilment of the contract in question.This was so held in Pool Shipping Company Limited vLond.on Coal Cornpany of Gibraltar Limited6S , wherethere was a contract for the supply of steamer coal subjectto ;

'In the event of any cause of circumstance beyond thecontrol of the sellen and/or suppliers of whateverdescription . . . which prevents the supply, shipment,carriage or delivery of all , . . . coal herein contractedfor . . ., or the normal working of this contract, sellers orsuppliers shall be entitled to relief from all obligationunder this contract,

It was held that in construing the phrase 'normal workingof the contract', the court was entitled to look beyond thebuyer and seller and consider the seller's commitmentsunder contract with other buyers, and in the circumstances,the normal working of the contract was prevented.In this case it was held that the defendants were entitled,provided the shortage was due to causes beyond theircontrol, to equalise the shortage of delivery among all theircontracts. This is what is called the 'normal working of thecontract', and in the circumstances of the case. this normalway of carrying out the contract is held to be the couectmethod, and one which the defendants were entitled toadopt.It is interesting to note that in the United States of America52-615 of the Universal Commercial code imposes on the

seller the duty to allocate his output among his purchasersin such a manner as he may determine to be'fair andreasonable'.

LIMITATIONS OF FORCE MAJEURXA further three possible limitations additional to thosementioned in the previous section will be discussed, namely:(a) Ejusdem generis ruleIn many commercial standard form contracts circumstanceswhich are deemed to be force majeure under that contractare often stated.Where this is the case, then ary general words or othernonstated circumstances which are claimed to constituteforce majeure will be read, ejusdem generis with thecircumstances which are stated.66(b) Force majeure held void for uncertaintyThe case of British Electrical (Cardiff) Limited v Patlq)LYessings Limited61 is one widely cited58 to illustrate thata term'the usual force majeure clauses to apply' is void foruncertainty,It is considered that this may be too liberal an interpretationof the decision in the case. The terms of the contract inrelation to the sale of steel contained the following clause;'Subject to force majeure conditions that the lovernmentrestricts the export of the material at the time of delivery'.At the time of the contract, there was a variety of forcemajeure conditions in the trade, but there was not evidencethat any particular ones had been agreed upon.The plaintiff brought an action against the defendant forrepudiation of an agreement to sell steel. The defendantalleged that the force majeure clause stated above was souncertain as to render the contract unenforceable, sincethere was in the trade, vadous force majeure clauses andno agreement had been reached between the parties as towhich of such consitions should apply.

r 6c(1876) 1 CPD 4236s(1939) 2 AEF. 43266M4tsoukk v hiestmqn. (1915) 1 KB 681. The exception clause gave an exception as force majeure, and the other as '. . . .strikes_ of workmen of the building yard where the vessel is being built, or the workshops where the machinery is being made,or at the works where steel is being manufactured for the steamer, or any works of the sub-contractor'.One of the causes of delay was the coal strike, which delayed the mamufacture of materials, thus delaying the construction ofthe boat being built in the berth which the plaintiffs boat would occupy.Per Bailhache J at pages 686, 687; 'If it (ie the detention of the berths;f the previous baot) had been the direct result of thecoal strike, there would have been great difficulty in saying that ihe case cami within the exception clause, seeing that certainstrikes are there particularly mentioned. It would have been difficult to hold that another strike operatins directlv uDon thisship ought ro be added to the specific strikes mentioned in the clause'.In the Concadora (1916) 2 AC 1994 202, per l-ord Parmoor; 'I take it that a force majeure clause should be construed ineach case with a close attention to the words which precede or follow it, and with a due regard to the nature and generalterms of the contract. The effect of the clause may vary with each instrument,.In Re An Arbitration Between the Podair Trading Company Limited; Bombay and Francois Tagher, (1949) 2 KB 27 j & 281,per Lord Goddard C J. 'In rule 53 force majeure is used in reference to 'timely fulfilment' of thi coniract and I should havethought that force majeure in that connection must be construed as being ejusdem generis with the causes of delay previouslymentioned'.I-ord Goddard continued; at page 286;'. . . and in our opinion the expression force majeure must also be construed withregard to the-words which precede or succeed it ' .Finally , in Fenwich and Schrnalz (1868) L R 3C p316, the contract provided for the defendant to load the plaintiffs shipwith coal in regular and customary tum. 'except in the crse of riots,itr ikes, or any other accidents beyoncl his control ' whichmight pre,vent or delay the loading. The defendant pleaded that a snowstorm previnted loading.Held per Willes J; 'Was the snowstorm, however, 'an accident beyond the conirol' of the defen-dant, No doubt it was beyondhis control but was it an accident, I think not, because an accident is not the same as an occurrence, but is something thathappens out of the ordinary course of things. A fall of snow is one of the ordinary operations of nature, and is an incidentrather than an accident, and therefore, without going into the rule that the general words are to be restricted to the samegenus as the specific words which precede them, I think this natural occuffence did not come within the terms of the exceptionin the charter-party'.67(19s3) lWLR 28068Halsbury's laws of England, Volume 9. 3rd edition p322, lootnote 6: Benjamin Sale of Goods -- page 663, footnote 39.

'15

The court dgcided on two counts;(i) M'cNair J held69 that the words contained in the

clause prevented the court frcm holding that anyenforceable contract was made. He held that thewords 'in the force majeure clause' made thesentence so vague and uncertain to be capable ofany precise meaning.To

(ii) In the second place McNair J71 considered that theword 'condition' in force majeure conditions means'stipulations' or 'clauses' and not 'contingencies' or'circumstances'.

Therefore, as there was in the trade a vadety of'forcemaieure conditions', and therefore fell within the lineof iuthorities of su ch cases as Bishop and Boxter Limited vAnglo Eastem Trading and Industrial Company Limited12,where an agreement 'subject to warplause' was held by theCourt of Appeal to be not a completed agreement as thewar clause took many forms, and as there was no evidencethat the parties had any particular form of clause in mind,there was no consensus ad idem and therefore no completedconfiact. 1aIt is interesting to note however, that McNair J

- considered

that had the word 'conditions' meant eitler 'contingencies'

or 'circumstances' that the words/phrase may not have beentoo vague to be of contraciual effect. Nor did McNair Jaccept that the further submission by the defendants thatthe phruse was too vague in the sense that it did not statethe legal consequences which would follow on proof offorce majeure, ie whether there should be cancellation ordissolution.Thus, it appears from this judgement that the followingthree clauses are too vague, and therefore, not binding;

Subject to force majeure conditions;Subject to force majeure stipulations;Subject to force majeure clauses;

unless those conditions, stipulations ol clauses can beascertained, because as McNair J states;?4

'. . , , no consensus ad idem will be held to exist wherethere still remains to be negotiated and agreed the exactform of the clauses or conditions refered to by theparties'.

However, the following clauses are not too vague and aretherefore binding;

Subject to force majeure contingencies;Subject to force majeure circumstances; and in additionMcNair J statesTsl'I am quite satisfied that an agreement for sale whichwas otherwise precise and contained the phrase 'subject

to force majeure' would be a valid and enforceablecontract'.

This begs the question. therefore. of *re definit ion of forcemajeure,As discussed above?6 , there is no legally acceptabledefinition of force majeure. Therefore, if a clause 'subject

to force majeure' is incorporated into a contract, thenunless this is defined therein, or unless the circumstance inwhich force majeure arises is stipulated, then parties do notknow what the clause intends exactly to cover;albeit theyhave a general knowledge perhaps from decided cases andthe possible intention from the particular contract.Does this mean, therefore, that unless there is an acceptabledefinition of force majeure then there will be no consensusad idem between the parties?It is submitted tlat this is too general a mealing to derivefrom the decision in this case, and that this must be putinto the context of the case.The overriding factor in this case is that there were severalforce majeure 'conditions' in use in the trade at the time ofthe contract. The fact that this contract did not stipulate orimply which of these conditions was to be included meantthat the whole of the contract was too vague because therewas no consensus ad idem.Again, it can be seen that the interpretation of the forcemajeure clause falls back onto the context in which it iswdtten. The danger of interpretation lies where it is removedfrom tlis context,TT

6e(19s3) 1WLR 3 2837OG. Scsmmell and Nephew Limited v Ouston. (1941) AC 241. McNair J in order to support his decision quoted this case"at

p255. 'In order to constitute a valid contract the parties must so express themselves that their meaning can be determined

with a reasonable degree of certainty'.71 Ibid p2 8372n944\ KB t273(19s3) 1 WRL 283 p285.74(19s3) 1 WLR 283 p284rslbid p285't6Thomas Borthwick (Glaaow) Ltd. v Fauvre snd Fairclough Ltd- (1968) 1 Lloyds Rep 16 p28. Per Donaldson J

??This case can be contrasted with Nicalene Limited v Simmonds, (1953) 1 AER 822; where there was a contract between

the seller and the buyer. The buyer in a l€tter offered to buy specific goods from the seller..The seller replied in writing; 'As

you have made the order direct to me, I am unable to confirm on my usual printed form which would have the usual force

majeure and war clauses, tlut I assume that we are in agreement that the usual conditions of acceptance apply'.

It was held by Denning L J; at page 826; 'in the case bifore the court there was nothing yet to be agreed. There was nothing

letl to furthei negotiate. The parties merely agreed that 'the usual conditions of acceptance apply'. That clause was so vague

and uncertain as io be incapable of any precise meaning. It is clearly severable from the rest of the contract, and can be

rejected without impairing the sense of reasonableness of the contract as a whole, and it should be so rejected'.

Tire difficulty, therJfore, which arises between the two cases, is when will a'vague' clause be severable from the main contract,

and when will such a term make the contract void for uncertainty.

This is a question outside the scope of this paper, and one which the courts must answer faced v/ith individual cases'

1 6

(c) Self inducementThe courts have firr y held that any self-induced act,omission or default on the part of the party seeking to beexcused will most certainly not fall into those eyentscovered by force majeure.?8

DEFINITION OF FORCE MAJEURE FOR CLAUSE 23(a)OF THE JCT STANDARD FORM OF CONTRACT

No exhaustive definition can be given to the concept offorce majeure as it differs, depending on the facts ofindividual cases.The statement of Lord Denning in Stelmson, Jordan andHsrrison Limited v McDonald and Evan s79 regarding thedefinition of a contract of service in employment lawcould usefully apply to the definition of force majeure;

'Was the contract a contract of service within themeaning which an ordinary person would give underthe words . . . . it is alrnost impossible to give a precisedefinit ion of the disrinction. lt is often easy to recognisea contract of sewice when you see ir but diff icult tJsay wherein the difference lies'.

It is easier to identi$/ a cfcumstance falling within themeaning of force majeure than to define it.Unfortunately, the term force majeure has not receivedjudical interpretation in a case conceming a buildingconIIact.Therefore, the other judgements in commercial cases mustbe used to provide an acceptable definition. This is bestdone by means of a check list, as follows;(a) The circumstances falling within the concept must be

independent of the will of the contracting parties;( Lebeaupin v Oispin)8O

(b) The circumstances must be outside the control of theparty relying on the force majeure clause;' (HongGuan & Co. Ltcl. v R. Jumabhoy and Sons LimitedSlthe Co ncacloroS2)

(c) The circumstances will not include those which arecommon or can be expected to occur in industry(Mqtsoukh v t iestman )83.

(d) The circumslances wii l nor include ftrose which thecontncting parties are aware or should be aware atthe time of making the conl1lact, (Iohn Batt and Co.( London ) Limited v Brooker, Dore and Comryn1t )s4 ,unless the intention by the parties at the time ofcontracting was that these should be includedl(ReardotSmith Line v Minister of Agiculture, Farmsand Fisheries)85

(e) Circumstances which are self-induced by the partyrelying on the clause will not amount to forci majeure,

.^ (Simons v NortonS6, Lebaupin v Oispin)B'l

(0 The circumstances which are claimed io constituteforce majeure must make the contract impossible.and not merely more diff icult or more expensive iocatry out (llalton v British Italian Trading Co.8B,

. Hackney Borough Council v Dore )89G) The party relying on the force maieure clause must do

all rhat is reasonably possible to pievenr rhe delayftom occwring; (Nugent v Smith)90

Having established the geneml criteria which must exist toprove force majeure under clause 23(a), it is necessary toexamine those specific circumstances which do, or wlichdo not. fall into the definit ion in the clause.Clause 23 includes other grounds for which air extension oftime would be granted by the architect, which if thev werenor separately stated may fall under the cjause 23{aisub-clause. These are:(t Clause 23(b) exceptionally inclement weather;

(Matsoukis v biestmqn;83 Dixon v MetropolitanBoard of l4orks;91 Blyth v Birmingham WarcrworksCo.e2 Briddon v Grcat North Railway Companyg3l

(ii) Clause 23(c) - loss or damage occasioned by any oithe contingencies refeued to in clause 20(A), (ti) or

. - (C); ( Keighley's ssss94 ; l{ugent v gmith)90(iii) Clause 23 (d) - civil commotion. local combination

of workmen, strike or lockout, etci (Lebequpin vCrispin9S ; Hackney Borough Council v Dori)89.

?8Ia the^nineteenth century case-of Sln mons v Norton, (1831) 7 Bing 640 at page 649; Tindall C J Speaking of vis nEjor;'It is sufficient, however, to say that the general issue applies only to iases wherJ the act complained of is not the act ofthe party;if it be the act of the party, he must admit and justify it on record . . . .'In Lebeaupin v Oispin per McCatdie J (1920) 2I(B 714 & 721;' Aman cannot rely on his own act, or negligence or omissionor default as force majeure'.This was also held in the case of Ne\e Zealtnd Shipping v Societe des Arteliers, (1919) AClat 6;per Lord Finlay L C. .it is a.pdnciple of law that no one in such a case takes advantage of the existence of a state of things which he himseif produced . . .,And per Lord Atkinson, at page 9; 'The application to contracts such as these of the principie that a man shall not bepemitted to take advantage ofhis own wrong, thus necessarily leaves to the blameless puri un option *frether he will arwill not insist on the stipulation that the contract shall be voii on the happening of the named eu'"nt. io o"priv" t im of thatoption would be but to effectuate the purpose of the blameable party'.The same approach to self inducement has been followed by theiouits regarding the doctrine of frustration.rtr Maitime National Fish Limited v ocean rluwlers Limitia,lozsl lciz+;Iird wright said; .The essence of .frustration'is that it should not be due to the act or election of the oartv'.Therefore, it can be seen that the common law approach is t-he same as tiat adopted in force majeure cases, which is summedup in Goirond's definition, (French commercial law 2nd edition, p854) where ie states that irrl ,"r- i"r". r"",.ure is a termused with reference to all circumstances . . . . ,not within his (man,i) power to control'.7e.(1953) 1 TLR 101 8s (1959) | I_{'yds 22380 (1920) 2K8716 Bs es22) | KB 43181 (1960) AC 684 e0 (1876i I KB s3l82 (1916)2 AC r99 er(1881) 7 QBD4I883 (1915) 1 KB 681 e2 (1856) l l Exch 78184 (1942) Lloyds List LR Vol. 72. 149 e3 (1858) 28 LJE' 5l8s (1962) 1 QB 4286 (1931) 7 Bins 640

e4 (1609) 10 Co Rep 139

87 (1920) 2KB 716

1 7

(iv) Clause 23 (i -by the contractor's inability to securesuch labour, goods and/or materials as are essential tocarry out the work s. (Matsoukis v fuiestrnenS3)

These circumstances will not constitute force majeure under

clause 23(a). Thus, if one of the above sub-clauses wasdeleted from the contract (ie the contract specificallyallows for the deletion of all or part of sub-clause 23 O;then the intention of the contracting parties must be thatthese circumstances shall not give rise to an extension oftime.Therefore, if one or more of the sub-clauses is struck out,this will not constitute a reason by force majeure underclause 23(a).

This is because of the application of the ejusdem generis ruleas discussed previously.As stated btl-ord Parmoor in the Concadoro96;

'I take it that a force majeure Clause should be construedin each case with a close attention to the words whichprecede or follow it, and with a due regard to the natureand general terms of the contmct".

And in Mottram Consultants v Benard Sunley and SonsLimited per *t4 6ros9?; (a case not concerned with theforce majeure provisions)

'Where the parties use a pdnted form and delete pafis ofit one can, in my opinion pay regard to what has beendeleted as part of the surrounding circumstances in thelight ofwhich one must construe what they have chosento leave in'.

Therefore as stated above, by striking out one of the sub-clauses from the contract, it must be the intention of thecontracting parties that the circumstances included underthe sub-clause shall not constitute a ground for an extensionof time under clause 23, and will not, therefore, fall underforce majeure sub-clause 23(a).This was the guidance given by the Royal Institution ofChartered Surveyors (Quantity Surveyors Practice andManagement Committee) where delays were caused tobuilding contracts by the 1973174 erctgy crisis. Statutoryrestrictions on the use of fuel and power causing delays orshortages to supplies of goods and materials in contractswhere clause 23O (ii) was deleted.98Finally, sub-clause 23(d) covers delays by civil commotion,strikes etc., in specific circumstances. Situations may wellarise where a delay may be caused by civil commotion,strikes etc., which do not fall into the specificclrcumstances.Therefore, will these grounds fall under clause 23(a) forcemajeure?There are t]vo possible approaches to th.is question;Firstly, it may be argued that the force majeure clause 23(a)is a''fall back' clause. That is to say that clause 23(a) is tobe read together with, and not independently of thefollowing sub-clauses.

These sub-clauses, therefore, would be by example ofoccurrences covered by the clause 23(a), although standingin their own right when used as a rcason for grantingextensions of time.Therefore, if an occurrence does not fall directly underclause 23(b), (c), (d) or O, then it is not necessadlyprecluded from reverting to clause 23(a).h'or example, strikes which do not fall under caluse 23(d)may fall within the meaning of force majeure under clause23(a). This is supported by Mastrandrea.99Secondly, it can be argued that the intention of the parties

at the time of contracting must have been only to haveincluded delays due to the strikes stated in clause 23(d),otherwise clause 23(d) would not have been included, andstrikes, etc., would have fal1en under clause 23(a) - forcemaieure.Thii was implied, albeit obiter dicta by Bailhache J in

Matsoukis t-Priestmar100. However, in that same case, the

court held that the delay was not the direct result of the

coal stdke, but that the strike affected the production of

materials by a supplier of the defendant, which delayed

the defendant in completing the ship b€ing constructedpdor to the plaintiffs shiP.ihis therefoie, generatly dislocated lhe defendanr's business'

which was due indirectly to the coal stdke, and was

therefore covered by the force majeure clause' Thus, it

deDends Durelv on the [acts ofthe case whelher slrikes.

civil commotion, etc., not covered by clause 23(d) wil l fall

under 23(a).There appear, therefore, to be very few circumstances

covered by clause 23(a). Such would include, war,

sovernment/administrative intervention, Act of Parliament

iccident or casualty (eg epidemics) and possibly strikes,

lockouts. etc., not directly affecting the works'

However, as l-ord Denning said above when referring to

contracts of se ice, it is easier to recognise a circumstance

of force majeure when you see it than to give a preclse

definition.One final requirement of clause 23 is thaU

'Upon it 6ecoming reasonably apparent that the progress

ofihe works is deiayed, the contractor shal forthwith

give written notice of the cause of the delay to thea r c h i t e c t . . . . '

Therefore, if the contractor fails to comply with this time

limit, his dght to an extension of time will be lost' This was

iiifri"a'n rno*as Borthwick v Fauvte and Faircloughlor

where clause 19 provided that notice of the likely delay due

to 'force majeuri' must be given by the shippers to their ̂ -buyers within 7 days of the occufience, or not less than 21

days before the commencement of the contract period,

whichever was the later.

This procedure was not followed by the shipper, and had

the delay been held to be a circumstance covered by force

maieure. then the seller would have been prevented from

relying on clause 19 for failure to comply with thisrequlremenr.

qs (1920) 2 KB 716

e6 (1916) 2 AC r99

e7 (L974) 2BI-R3gSEnergy Crisis. Statutory restrictions on the use of fuel and power. Chartered Surveyor 1914 April, p267

I Mastrandrea, F. An example - force majeure' QS Weekly 1977 September' p4'

100 (1915) I KB 681. pp686-68?. 'Was the detention of the berths in those circumstances a case of force majeure. If i t had

been the direct result of the coal strike there woulC have been great difficulty in saying that the case came within the

exceptions clause, seeing that certain strikes are there particularly mentioned. It would have been difficult to hold that

another strike operating directly upon this ship ought to be added to the specific strikes mentioned in this clause'.

101 (1968) 1 Lloyds Rep 16.

1 8

APPENDIX IEXTRACT FROM THE GENERAL CONTRACT OF THE GRAIN AND FEED TRADE ASSOCIATION

PROHIBITION-I0 case of prohibition of export, blockade or hostilities or in case of any executive or legislative act done by o! on behalf of thegovernmetrt of the country of origin or of the terdtory where the port or porfs of shipment named herein is/are situat€, restricting export, wbetherpartially or oth€rwise, any such restristion shall be deeried by both parties to apply to this conuact and to the extent of such total o! paitial restrictioDto prevent fulfilmeat whether by shipment or by aoy other meaqs whatsoever aod !o that extent this coDtract or aDy uDfulflled portion thereofshall becancelled. Sellers shall advisc Buyers without delay with the r€asons therefor and, if requiled, Sellers must produce proof to justify the carcellatioD.FORCE MAJEURE, STRIKES ETc.-Sellers shall not be rcsponsible for dclay in $hipmeDt of the goods or any part thercof occasioned by any Aclof God, strike, lockout, riot or civil commotion, combination of workmcn, breakdown of machiftf,y, 6rc or any crusc comprehended in the terrn'forcemajeule'. If delay in shipment is likely to occur for any of the above rcasoDs, Shippcrs shall giv€ notic€ to their Buyers by telegram, telex or teleprinteror by similar advice withio 7 coDs€cltive days of the o@urrencc, or not lcss than 2l coEecutive days beforc the coomencemcnt of the contract period,whichever is late!. The notice shall state the tcasod(s) for the anticipated delay, If after giviDS such notice an cxtcotion to the shipping period is.cquircd, then Sh.ippers shall givc furthcr troticr not late! than 2 days aftcr thc last day of the coDtract pcriod of shipmcDt stating the port or ports ofloading from which the goods were intended to be shipp€d, and shipments efectcd after the coutract period shall bc Iimited to the port or ports sonominated. If shipment be delayed for more thaIl oaa caleDdar month, Buyers shall have the option of caacdliDg the d€layed portion of the contract,such option to be exercised by Buyers giving notice to be re.eivcd by Sellers Dot later than the 6rst busincss day after the additional calendar month.If &yers do not exercisc this option, such delayed portion shall bc automatically extcDded for a further period of ooe month. If shipment under thiscl{use be prevented during the further one month's extcdsion, the contract shall be considered void. Buye.s shall have no claim against S€llers for delayor non-shipment under this clause, provided that Sellers shall havc supplied to Buyers, if required, satigfactory evidcnce justifyirg the delay or nod-fulfilmeot.NOTICES-Any Notic€s received aftcr 1600 hours o! a business day $hall b€ deemcd to have b€en receivcd on the businesr day following. A Noticeto the Broker or Agent shall bc d€emcd a Notice uoder this CoDtract. All Notices giv€n undcr this Cont.acl shall be givcn by letter or by tele$am orby telex or by other method of rapid writteq communication. Itr qasc of.€sales all Notic€s shall be passed on without d€lay by Buyers to their resp€Gtive Sellers or vice versa-NON-BUSINESS DAYs-Saturdays, Sundays and thc ofncially rerognis€d and/or lcgal holidays of the rqlpcctive countries and aDy days which ThcCrain & Feed Trade Association Ltd. may de€laE a! NoD-Busin€$ Days for sp€cifc purposes, shall be non-busioess days, Should the time limit fordoing any act o. giviog any notice expi.c oo a Non-Busitrcss Day, the time so limited shall be exteoded until the first busiress day thereafter.The pedod of shipment shall not b€ affected by this claus..DEFAULT-In default of fumlment of contract by cithcr party, the other, al his discretion, shall, after gividg notice by letter, telegxam, or telex, havethe right to sell or purchase as the case may bc, agiainst thc defaulter aqd the defaulter shall rnake good the loss, if ady, oo such purchase or sale ond€maDd. If the party liable to pay be dissatisfed with thc p.ice of such sale or purchase or if the above right is Dot exercised aDd damages cannot bemutually agreed, any damages, payabl. by the party in default shall be scttled by arbitlation. In the event of default by Sellers entitling Buyers todamages, such damages shall be based upon thc actual or estimated value of the goods on date of default, to be fixed by arbitration unless mutuallyagreed, and nothing contained in or implicd uDder this contract shall entitle Buyers to racover any damages io respect of loss of profit upon any SubContracts made by thems€lves or otheN unless the Arbitrators or Board of Appeal, haviog regard to aBy special circumstances, shall io their soleand absolute disctetior award such damages. In the event of default in shipment or delivery, damages, if any, shall be computed upo[ lhe meancontract quantity.Default may be declared by Seller at any timc after expiry ofthe contruct period, and lhe default date shall then be the first business day after the dateof Seller's advice to his Buyer. If default has not already be€n declared thed notwithstandidg the provisions stated in sub-clause (b) of the AppropriationClause, if a notice of appropriation is not passed by the 10th consecutive day after the last day for approp atiod laid down in the cont.act, the Sellershall bc dcemed to bc in default and the default date shall theD be the 6rst business day thergafte!.CIRCLE-Where a Seller repurchases from his Buy€r or frorn any subsequent Buyer the same goods or part thereof, a circle shall be consideredto exist as regards the particular goods so repurchased, and the provisions of the Default Clause shall not apply. (For the purpose of this Clausethe same goods shall mean goods of the same descdption, from the same couDtry of origin, of the safte quality, and, where applicable, of the sameanalysis warratrty, for shipmedt to the same port(s) of destination duriDg the same pedod of shipme[t), Subject to the terms of the ProhibitionClause in the contract, if goods are not appropriated, or, having beeD appropdated documents are not presented, invoices based on the meancont.act qualtity shall be s€ttled betweea each Buyer aod his S€ller in the circle by paymeDt by each Buyer to his Seller of the excess of the S€lleGinvoice amount of the lowest invoice amount in the circle. Payment shall be due not later than 15 consecutive days alter the last day forappropiatio!, or, should the circle not be ascertained before the eipiry of this time, then payment shall t'e due not tater ihan 15 consecutive daysafter the cilcle is ascertained. All Sellers and Buyers shall give every assistance to asc€rtain the circle and when a circle shall have been ascertainedin accordance witb this Clause same shall be biDding on all parties to the circle. As between Buyers and Selle$ in the circle, the non-presentation of documents by each S€lle! to his Buyer shall not be considercd a breach of contract. Should any party in the circle colnmit anyact comprehended id the Insolvency Clause of the contract, p.ior to the date of paymcnt being due as stated above the invoice amount for the goodscalculated at the closing out price as provided for in the Insolvency Clause, shall be taken as the basis for settlement inslead of ihe lowest invoic€amount in the cifcle, and in this event, each Buyer shall make paymeDt to his Seller, or each Seller shall make payment to his Buyer, of thedifreredce betw€en the closing out pdce aod his contract price as the case rnay be.INSOLVENCY-If before the fulfilment of this contract, €itbe. party shall suspeDd payincDt!, commit an act of bankruptcy, lotify any of his c.editoNthat he is unable t6 meet debts or that he has suspended ot that he is about to suspend payment of his debts, coDvene, call or hold a meetiog of credi-tors, convene, call or hold a meeting to go into liquidation (other than for reconstruction or amalgarnation) or shall apply for an omcial moratorium,have a petition prescntcd for winding up, or shall have a Receive. appointed, lhe conract shall forthwith be closed, either at the market price thencurrent for similar gooda, or at the option of the other party, at a p c€ to be ascertained by re-purchase or re-sale, and the difrerence b€tween thecontract pric. and the closing price shall be the arnount payable or receivable under this codtract.DOMrcILE-Buyers and Sellers agree that, for the purpos€ of proc€edings either legal or by arbitration, this Cotrtract shall be deemed to have beenmade in England, and to be performed there, any correspondence in reference to the ofer, th€ acceptance, the plac€ of payment, o. otherwise notwith-standing, and the Coufls of England or arbitralors appointed io EtrglaDd, as the case may b€, shall, except for the purpose of enforcing any awardmade in pusuance of thc arbitration clause hereoi have exclusive jurisdiction over all disputes which may arise udder lhis CoDtract. Such disputesshall be settl€d according to the law ofEngland, whatever the domicile, resideoce or place of business ofthe pa.lies to this Contract may be or become.Any party to this Contract residing or carrying on business els€where than in Engladd or Wales, shall for the purpose of proce€diogs at law or ina.bitratiod be considered as ordinarily resideot o. carrying on business at the offces of Th€ Crain and Fecd Trade Assodiation Limited, aDd if inscotland, he shall be held to havc prorogated jursidiction against himself to the English Courts; or if in lreland to have submitted to the jurisdictionand to be bound by the decGion of the English Courts. The service of proccedings upon any such parry by leaviDg rhe sanre ai $e omce of TheCrain aod Feed Trade Association Limited, together with the posting of a copy of such proceedings to his address abroad, or in Scotland or inkeland, shall be deemed good service, any rule of law or equity to thc contrary Dotwithstaoding.ARBITRATION-

cognrsant.(b) Neither party hereto, nor aoy persons claiming under either of them, shall briog a|ly action or other legal proceedings against the other of themiD rcspect of any such dispute until such dispute shall firsl have been heard and determined b) rhe arbitrators, umpire or Board of Appeal, as the casemay be, in accordanc€ with th. Arbitration Rules and it is expressly agle€d aod de.laled that rhe obtainiDg of ao award from the a.bitlators, umpire orBoard of Appeal, as the cas€ may be, shall b€ a condition p.ecedent to the right of either party hereto or of any persoa claiming uDder either ofthem to bring any actiotr or othcr legal prLceedings against tbe other of them in tespect of any such dispute.

(a) ADy dispute arising out ofor under this Contrad shall be settled by arbitratioo in London in accordanc. with the Arbitratioo Rules No, 125.ofThe Grain and Feed Trade Associatio! Limited, such Rules forming pan of this Contract aod of which both parties hereto shall be deamed to be

ULIS CLAUSE-ThC Unifom l-aw on Sales and the Uniform Law on Formatio.l to which effect is givcu by the Uniform Laws oD IntemationalSales Act 1967, shall not apply to this contract.

1 9

EXTRACT FROM THE STANDARD TRADE CUSTOMS ISSUED BY THE BRITTSH| PAPER MILLS

STANDARD TRADE CUSTOMS ISSUED BY THE BRITISHPA?ER MILLS

GENERAL _ APPLYING TO ALL PAPER AND BOARD(Hereinafter Referred to as Paper)

FORCE MAJEURE

(a) Dehyed DeliveriesIn the event of delivery by the Seller or acceptanoe by theBuyer being wholly or partly prevented or interfered withby act of God, hosti l i t ies, threat of war, riot, strike, lock out,civil commolion, f ire, drought, f lood, restriction byGovernment or other competent ruthority, shortfall inanticipated supplies oi raw materinl, or by any of thefollowing contingencies beyond the control of the partyaffected: interruption of transport, destruclion or damageof premises, plant or machinery, or lny other causes whetl]erof similar character or not, beyond the control of the partyaffected including, in the oase of the Buyer, cruses uffectingthe Buyer's customer, the following provisions shall huveeffect:

(1) The party affected shall give to thc other partyimmediate notice of causc preven{ing or interferingwith delivery or ucceptxnce xnd the cxlent lo whiclldelivery or acceptarrce is prevented or interl-ered witl iand (if possible) the problble durr{ion of the caLrseof prevention or intert-erence.

(2) During the continulnce oI t lre cause of prevention orinterference, delivery ol t lre urrluli l i led portion o1'the contract shall b9 suspc|dcd or, itr t l le crse ol xpartial prevention or interference, feduoed unli l lhecause shall have ceased 1() operlte.

APPENDIX II

(3) Immediately the cause of the prevention or interferencahas ceased to operate, the party concerned shall givenotice thereof to the other party, and as soon aspracticable thereafter delivery shall be resumed inaccordance with the terms of the contract.

(4) If a cause of prevention or interference shall continuefor more than one calendar month after the stipulateddate of delivery either party may by notice in writ ingto the other cancel that portion affected by the delay.

(5) Goods due for delivery within one calendar monlh orin the course of manufacture or in tnnsit at the timeofany notice as aforesaid being given by the Buyermust be accepted by the Buyer notwithstanding suchnotice, provided the Buyer has been advised by theSeller of the intended making date.

(b) lncreused CbstsIn the event of increases in costs of production of paper andboa|d cuused by act of God, hosti l i t ies, threat of war, riot,strike or lock-out, the Seller shall notify the Buyer of suchincreuse in tl ie cost in respect of any unfi l led portion of acontract and the Buyer shall have the optiol of agreeing topay the extra cost or clncell ing the remainder of thecontract. Any such notif ication shall be sent in writ ing andunless the Buyer within seven working days of receivingthe Seller's noti l- i0ation of ir lcreases cost shall by notice inwrit ing to the Seller refuse to pay such incrersed cost t l leBuyer shall be deemed to have elected to irccept thereniLitrder of the contraot rnd it shall be e\ecutedrccordingly.

20

A?PENDIX IIIEXTRACT FROM THE CONTRAqT AND CONTRACT RULES OF TIIE SUGAR ASSOCIATION OF LONDON

FORCE MAJEURE.C.I.F. Free Out & C. & F. Free Out Contralts.120. Wherc thc Contract sp€cifieS thc placc of origin of *fflf#

thc sugar and, in thc casc of any othcr contract, oncc the titDf,.

Seller has dcclared an origin, thc following Rule shall applyto the origin so specifi€d or dcclarcd.

Sbould Government intcrvention, waf, strik€s, rebel.lion, insurrection, political or labour disturbances, civil com-motion, fire, sfess of weather, act of God or any cause olForce Majeure (whether or not of like kind to those beforcmentioned) b€yond the Scllcr's control prcvent directly orindirecdy within thc shipping period specified in rhe contract

(a) the supply to or delivery at shipping port in wholeor in part of the sugar allocated or to be allocatedby the Seller against the contract

of

(b) thc vcsscls dcclarcd or to bc declarcd fron load. ffifing tbc suglr and thc Sellcr or his sgcot bc rttD.c- le6tunablc to cngagc altcmativc similar frcight spaccto cnablc him to eftcct shipmcnt within thc con-tract pcriod thc Seller shall immcdiaiely sdviscthc Buycr (by crblc or t lcpdnter if abroad) ofsuch fact and thc quantity so sficctcd and thcshipping pcriod shrll bc cxtendcd by thirty days.Il thc Scllcr is prcvcntcd fmm advising immcdi-atcly through circumstancB bcyond his conuolhc shall notify the Buycr &r soon as possible. Ifthc shipmcni is still prcveoted b,y thc cod of thccxt€ndcd pcriod, thc Buyer shall havc thc optionof cancelling thc contract for thc affcctcdquartity or of taking dclivcry at thc contrrctpricc without claiming damagG as soon as thcsugar can bc shippcd. Thc Buycr's dccision shallbc notified to thc Sbller (by cablc or tclcprintcr ilabroad) promptly rftcr rcccipt of the Scllcr'sadvicc. Should thc Buycr clcct not to canccl thccontract but shipmcnt of thc sugar in wholc orin part still remain impo&sible sirty days aftcrthc last shipping datc providcd for by thc con.tract, thc contract shall bc void for such quantitywithout penalty payablc or rcccivablc-

. In all c.s6 whcrc the controct provides fordclivcry by instalments, each instalment shall bedeemcd a scparatc contract.

Thc party to a contract claiming Forcc Majeurcshall, il requcstcd by thc othcr party submit suchcvidcncc as may bc nccassary to provc satisfac.torily thc cxistcnca of any causc of prcventionor delay claimcd undcr this Rulc.

r