The British humorist, Alan Coren, satirically and accurately pointed out that the Act of God provisions in insurance policies mean “roughly that you cannot be insured for the accidents that are most likely to happen to you.” In the era of climate change, 1000 year floods which occur every year, and political instability throughout the world, Mr. Coren’s humor is especially apropos to drafting Force Majeure provisions.
Most construction contracts (including commonly used AIA, ConsensusDocs, and EJCDC form contracts) contain boiler plate Force Majeure or Act of God provisions addressing what happens when construction is delayed by unforeseeable events of nature (floods, earthquakes, fire or other unanticipated weather) or political events (war, strike or revolution). However, it is crucial that construction contracts clearly identify events of Force Majeure and their impact on contract terms. They should also allocate the risks of delay caused by Force Majeure events. Click here to read the full article.