Business Finance Homework Help. SDSU Force Majeure Clause Discussion
Force Majeure clauses are found in many contracts. Here’s a link explaining how they work along with some contract drafting strategies:
Link (Links to an external site.)
These force majeure clauses have recently become especially relevant. Here’s a coronavirus-related case based on the Metropolitan Opera:
Link (Links to an external site.)
Let’s assume this is the clause used in the Metropolitan Opera contract:
Force Majeure (Links to an external site.). Neither party shall be liable for any costs or damages due to delay or nonperformance under this services contract arising out of any cause or event beyond such party’s control, including, without limitation, cessation of services hereunder or any damages resulting therefrom to the other party as a result of work stoppage, power or other mechanical failure, computer virus, natural disaster, governmental action, or communication disruption.
Use this clause to answer these questions based on the Metropolitan Opera scenario above:
1) Which language in the above force majeure clause can the Metropolitan Opera use to make the case that it does not have to preform? Explain.
2) Now argue the other side. What argument can the performers make that the coronavirus disruption does not apply here?
3) In the end, who do you believe determines whether or not this clause applies?
4) Should these clauses be allowed in any contracts for personal services for those in performing arts? How about accountants or other professionals? Should the hiring party accept the risk of disruption or should the risk fall on the party providing services?
