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Force Majeure Clause - simply put... If something completely unpredictable occurs, a contract may be voided.
This term now makes more sense, given the current pandemic crisis. This may be used to have contract holders invoking force majeure for relief from creditors. However, mortgage holders looking for a way out of their debt obligations are likely to be out of luck when it comes to following the path of force majeure. Here's how force majeure works in a contract.
What is an act of force majeure?
Contracts with a force majeure clause often list (very) specific potential calamities. If any of those catastrophe go into effect, a contracted party is allowed to back out of the deal with no penalty.
Force majeure events often written into contracts include:
"Acts of God," which often include severe weather, floods, earthquakes, hurricanes, fires, etc. Acts of war Acts of terrorism Acts of government authorities Strikes or labor disputes An inability to secure materials Other causes beyond the reasonable control of a party.
To learn more, contact Linda today, 718-423-3130 LRappaport@Greenthal.com