{"id":203300,"date":"2021-03-09T13:55:31","date_gmt":"2021-03-09T00:55:31","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=203300"},"modified":"2025-06-27T19:49:57","modified_gmt":"2025-06-27T06:49:57","slug":"how-can-i-rely-on-force-majeure","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/commercial-contracts\/how-can-i-rely-on-force-majeure\/","title":{"rendered":"How Can I Rely on Force Majeure in New Zealand?"},"content":{"rendered":"\n<p><span style=\"font-weight: 400\">When you enter into a commercial contract, you usually intend to see the contract through its term. However, there may be unforeseeable circumstances that prevent you from fulfilling your contractual obligations including natural disasters pandemics, or government-imposed restrictions. In such situations, you may be able to rely on a force majeure clause to terminate or amend your contract. This article will outline:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">what a force majeure clause is;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the steps you have to take to rely on the provision; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the consequences of relying on such a clause.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">What is a Force Majeure Clause?<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">A <a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/force-majeure-clauses\/\">force majeure event<\/a>, a \u2018superior force\u2019 or an \u2018act of God\u2019 refers to an event that occurs that is unanticipated and out of the control of contracting parties. This event makes it impossible for one or both of the contracting parties to fulfil their contractual obligations. In anticipation of the potential occurrence of a disruptive event, contracting parties will include a force majeure clause in their commercial contract. These clauses fall under the doctrine of frustration. This provision will:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">detail a list of events that come under the definition of a force majeure event;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">outline the process that a party must follow to rely on the clause; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">describe how the clause can assist the party impacted by the event.<\/span><\/li>\n<\/ul>\n\n\n\n<div class=\"box box--info box--icon\">\n<p><span style=\"font-weight: 400\">By including such a clause in your contract, you ensure that you are not in breach of your contract if, due to an unforeseeable and faultless event, you are unable to perform your contractual obligations.<\/span><\/p>\n<\/div>\n\n\n\n<p><span style=\"font-weight: 400\">A force majeure event must occur without fault and must not result from any act or omission by either contracting party.<\/span> <span style=\"font-weight: 400\">Your provision will likely cover the following circumstances:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">an earthquake;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">a volcanic eruption;&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">severe flooding; or<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">a pandemic, such as the COVID-19 pandemic.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">Most clauses will include a catch-all phrase, such as \u201cand any other events beyond the party\u2019s control\u201d, to ensure that the occurrence of any other faultless events engages the provision.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Steps to Rely on a Force Majeure Clause<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">To rely on a force majeure provision, you will have to first ensure that your commercial contract <a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/key-terms-every-business-contract-should-have\/\">contains such a clause<\/a>. If your contract expressly states that the contract remains alive despite an intervening or force majeure event, you will not be able to rely on a force majeure argument.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">You, as the affected party, will generally have to prove the following elements to a court to rely on the provision:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">that the occurrence of the event was beyond your control;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">that the event has prevented you from fulfilling your contractual obligations. This element has quite a high threshold. You will have to demonstrate that it is physically or legally impossible for you to fulfil your contractual obligations. This inability to perform the contract must be clearly linked to the occurrence and effects of the event; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">you have made all reasonable endeavours to rectify the event and counteract any damage the event has caused. It is not sufficient to engage the force majeure clause as soon as the event has occurred.<\/span> You must be able to demonstrate you took mitigating steps to avoid loss where possible.<\/li>\n<\/ul>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>You may also need to promptly give your contracting party written notice that explains the nature of the event and how long you expect it to affect your obligations. Delay in issuing such notice could result in a waiver of your right to rely on the clause. Additionally, the burden of proof rests heavily on the party invoking the clause, so collecting supporting evidence, such as official records, correspondence, and expert reports, is crucial.<\/p>\n<\/div>\n\n\n\n<p>However, your clause may detail different or additional elements that you must demonstrate to rely on the clause. You must examine the clause in your commercial contract before you engage in a case to rely on the provision.<\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+64800005570\" class=\"not-prose\">0800 005 570<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left gform_input_bg_white    \">\n    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If you successfully demonstrate the elements outlined in the provision, you will likely be able to:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\"><a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/terminate-business-contract-new-zealand\/\">terminate your commercial contract.<\/a> Once your contract is terminated, you are no longer required to fulfil any of the obligations contained in the contractual provisions;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">suspend the performance of your obligations under the contract until the time that the event is no longer an interference; or<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">be pardoned from any consequences that may flow from the non-performance of your contractual obligations.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">In addition to these primary forms of relief, your clause may also allow you to recover:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">expenses paid in the performance of or the attempt to perform your contractual obligations; or<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">compensation for any actions committed under the contract that conferred a non-monetary benefit to your contracting party.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<p>This relief can play an important role in long-term agreements when unforeseen events significantly affect performance. However, the nature and scope of the relief will depend on how clearly the parties draft and interpret the clause. Courts may require strict proof that the event was truly unforeseeable and beyond reasonable control, so documentation and timely notice are essential.<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2021\/12\/22115855\/cytonn-photography-GJao3ZTX9gU-unsplash-e1640129621597.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Commercial Contracts Checklist<\/div>\n            <div class=\"body-text\">\n                <p>To protect your business, ensure supplier contracts meet your business\u2019 needs. Our free Commercial Contracts Checklist will help.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.nz\/Commercial_Contracts_Guide_NZ.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Key Takeaways<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">Although you enter into a commercial contract intending to fulfil all of your contractual obligations, there may be circumstances that prevent you from doing so. These situations are known as force majeure events, such as earthquakes or pandemics. To anticipate the occurrence of these events, it is best practice to include a force majeure clause in your commercial contracts. To rely on this clause, you will usually have to demonstrate that:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">the occurrence of the event was beyond your control;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the event has prevented you from fulfilling your contractual obligations; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">you have made all reasonable efforts to rectify the event and counteract any damage caused.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">If you need assistance in relying on a force majeure clause, our experienced <a href=\"https:\/\/legalvision.co.nz\/contract-lawyers-lp\">contract lawyers<\/a> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on <a href=\"tel:+64800005570\" class=\"AVANSERnumber dynamic-number\">0800 005 570<\/a> or visit our <a href=\"https:\/\/legalvision.co.nz\/membership\/\" target=\"_blank\" rel=\"noreferrer noopener\">membership page<\/a>.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Frequently Asked Questions<\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1615250058478\"><strong class=\"schema-faq-question\"><strong>What is a force majeure event?<\/strong><\/strong> <p class=\"schema-faq-answer\">It is an occasion that is unanticipated and out of the control of contracting parties. Such events are also known as superior forces or acts of God and include earthquakes, volcanic eruptions and pandemics.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1615250086791\"><strong class=\"schema-faq-question\"><strong>What is a force majeure clause?<\/strong><\/strong> <p class=\"schema-faq-answer\">It is a provision in a contract that details what contracting parties can do if an unanticipated event occurs that is out of the control of contracting parties.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1615250097387\"><strong class=\"schema-faq-question\"><strong>What do I have to do to rely on a force majeure clause?<\/strong><\/strong> <p class=\"schema-faq-answer\">You will usually have to demonstrate that the occurrence of the force majeure event was beyond your control and the event has prevented you from fulfilling your contractual obligations. You will also have to show you have taken all reasonable steps to rectify the event and counteract any damage caused.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1615250107788\"><strong class=\"schema-faq-question\"><strong>What happens if I rely on a force majeure clause?<\/strong><\/strong> <p class=\"schema-faq-answer\">You will be able to cancel your contract altogether, suspend the performance of your contractual obligations or be pardoned from any consequences that may flow from the non-performance of your contractual obligations.<\/p> <\/div> <\/div>\n\n\n\n\n","protected":false},"excerpt":{"rendered":"<p>When you enter into a commercial contract, you usually intend to see the contract through its term. However, there may be unforeseeable circumstances that prevent you from fulfilling your contractual obligations including natural disasters pandemics, or government-imposed restrictions. In such situations, you may be able to rely on a force majeure clause to terminate or<a href=\"https:\/\/legalvision.co.nz\/commercial-contracts\/how-can-i-rely-on-force-majeure\/\">Continue reading <span class=\"sr-only\">&#8220;How Can I Rely on Force Majeure in New Zealand?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13496,"featured_media":228268,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[3],"tags":[25,41,54,655],"class_list":["post-203300","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-contracts","tag-small-business","tag-commercial-contracts","tag-medium-business","tag-force-majeure"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Can I Rely on Force Majeure in NZ? 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