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My new favorite contract term: Force Majeure

May 3, 2011

Lawyers make their livings around defining and redefining words and phrases.  So as a real estate broker I’ve grown used to having to play the translator between legal-ese and plain, American english for my clients.

You generally find this language barrier at it’s finest in transactions with property developers and banks.  Working with developers, banks and federal institutions is different than working with Joe Smith in that they like to create their own contracts and use language that points most of the contracts benefits back to themselves and they use more legal-ese to do it.  I’ve been working with some clients on a Fannie Mae owned property.  In looking through this contract I came across a phrase I’d not encountered before:  Force Majeure

This wasn’t a phrase I’d learned for real estate exam and it couldn’t even be found in my 500 some-odd paged real estate reference book. 

“Hmmm… Force Majeure …. That sounds provocative!”

And provoke me it did, right into the loving arms of Dictionary.com.  There I found that Force Majeure is a French term that literally translates to “Superior Force” and is defined as “an unexpected and disruptive event that may operate to excuse a party from a contract. ”  These are brilliant in and of themselves but Fannie Mae contract goes into more specific terms that have endeared me to the term all the more:

Force Majeure: Except as provided in section 21 to this Addendum, no party shall be responsible for delays or failure of performance resulting from acts of God, riots, acts of war and terrorism, epidemics, power failures, earthquakes, or other disasters providing such delay or failure of performance could not have been prevented by reasonable precautions and cannot be circumvented by such party through use of alternate sources, work around plans or other means.

I may have a sick sense of humor but for some reason this paragraph cracks me up.  I can just see some big wig corporate attorney arguing for damages on our contract by making remarks like:

“Your honor… The Buyer has lived in Washington for 32 years.  Clearly they knew Mt. Rainier would erupt at some point and should have made the proper work around arrangements in order to be able to make it to escrow to sign papers and close this transaction on time.  And besides, only half the county was covered by the Lahar.  By my calculations that’s half the traffic eliminated making it easier, not harder for the buyer to make their appointment. ”

Or some lame buyer trying to pull the ultimate “dog ate my homework” maneuver…

“Um, like it was December… and like the sun came out.  That’s like… an act of God.  I couldn’t see through the brightness so I like…  just stayed home.  Like…  can I have my earnest money back now?”

You know somebody has tried to pull something like that and that’s why paragraphs like these are included in contracts.  Truth is often stranger than fiction.  I just think it’s funny that things like “riots, acts of war and terrorism, epidemics” are so specifically noted.  It’s as though their saying “these excuses have already been used”. 

I don’t know.  Maybe I’m just weird but I find stuff like that funny.

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