Introduction
Contracts often face challenges when unforeseen events—such as natural disasters, government actions, or pandemics—make performance impossible or excessively difficult. The legal response to such events varies across jurisdictions, with different doctrines and the use of force majeure clauses shaping outcomes. This practice note provides a comparative overview of how the United States, Germany, England & Wales, and South Africa address contract termination or suspension when events outside the parties’ control occur.
Jurisdictional Approaches
United States
- Force Majeure Clauses: Commonly included in contracts, but courts interpret them narrowly. They excuse performance only if the event is truly beyond control and unforeseeable.
- Doctrines of Excuse:
- Impracticability (UCC §2-615): Excuses performance if unforeseen events make it excessively difficult or costly.
- Frustration of Purpose (Restatement (Second) of Contracts §265): Applies when the principal purpose of the contract is destroyed by an unforeseen event.
- Effect: Performance may be suspended or terminated depending on contract wording and judicial interpretation.
Germany
- No Statutory Force Majeure: The German Civil Code (BGB) does not recognize force majeure as a statutory concept.
- Contractual Clauses: Parties must expressly include force majeure provisions to suspend or terminate obligations.
- Statutory Doctrines:
- Impossibility (§275 BGB): If performance becomes objectively impossible, the obligation is extinguished.
- Hardship (§313 BGB – Störung der Geschäftsgrundlage): If circumstances fundamentally change, parties may renegotiate or terminate.
- Effect: Without a clause, termination depends on impossibility or hardship doctrines.
England & Wales
- Force Majeure Clauses: Not implied by law; must be expressly drafted and are strictly enforced by courts.
- Frustration Doctrine: Discharges a contract if an unforeseen event makes performance impossible or radically different from what was agreed.
- Effect:
- Force Majeure Clause: May allow suspension, extension of time, or termination.
- Frustration: Automatically terminates the contract, with losses allocated under the Law Reform (Frustrated Contracts) Act 1943.
South Africa
- Force Majeure Clauses: Common in practice but not required; operate similarly to international standards.
- Supervening Impossibility: Rooted in Roman-Dutch law; if performance becomes objectively impossible due to vis major (act of God) or casus fortuitus (chance event), obligations are extinguished.
- Frustration Doctrine: Not recognized; contractual certainty is prioritized.
- Effect: Performance is discharged if impossible; suspension or termination depends on contract wording.
Comparative Table
| Jurisdiction | Default Rule (No Clause) | Role of Force Majeure Clauses | Effect on Contract |
| USA | Impracticability & Frustration doctrines | Common, narrowly construed | Suspension or termination depending on clause/court |
| Germany | Impossibility (§275 BGB) & Hardship (§313) | Must be expressly included | Extinguishes obligation or allows renegotiation |
| England & Wales | Frustration doctrine | Must be expressly included | Clause: suspension/termination; Frustration: automatic termination |
| South Africa | Supervening impossibility (vis major/casus fortuitus) | Common but not required | Discharge of obligations; clause may allow suspension |
Key Risks & Considerations
- Drafting Precision: In Germany and England & Wales, force majeure clauses must be explicit; vague wording risks unenforceability.
- Jurisdictional Differences: South Africa rejects frustration, while England embraces it.
- Allocation of Risk: USA and Germany allow renegotiation or suspension, while England & Wales often lead to termination.
- Client-Facing Takeaway: Always include a tailored force majeure clause to ensure predictable outcomes across jurisdictions.
Conclusion
The treatment of unforeseen events in contract law varies significantly across jurisdictions. While force majeure clauses are a common tool, their effectiveness depends on precise drafting and the legal doctrines of the relevant country. Parties should always tailor force majeure provisions to the jurisdiction and contract at hand to ensure clarity and predictability in the event of disruption.
References and Further Information
- https://academic.oup.com/ajcl/article/70/Supplement_1/i70/6696364
- https://thisvsthat.io/force-majeure-vs-frustration
- https://resourcehub.bakermckenzie.com/en/resources/force-majeure-tracker/emea/germany/topics/force-majeure-comparative-table
- https://cms.law/en/int/expert-guides/force-majeure-hardship-in-relation-to-conflict-and-sanctions/germany
- https://www.nortonrosefulbright.com/en-gb/knowledge/publications/b54cf723/force-majeure-hardship-clauses-and-frustration-in-english-law-contracts-amid-covid-19
- https://www.osborneclarke.com/insights/uk-supreme-court-guides-contractual-terms-and-use-force-majeure
- https://sprintlaw.co.uk/articles/force-majeure-clause-what-it-means-and-how-to-use-it/
- https://gslaw.co.za/understanding-force-majeure-clauses-in-contracts/
- https://open.uct.ac.za/bitstreams/0acea96e-e35f-4839-b6fa-921865483914/download
Disclaimer: This practice note is for informational purposes only and does not constitute legal advice. Contractual and legal outcomes depend on specific facts and applicable law. Readers should consult qualified legal professionals for advice tailored to their circumstances.