What does a Force Majeure clause protect against?

A Force Majeure clause is a contract provision that relieves parties from performing their contractual obligations when certain extraordinary events or circumstances beyond their control occur. This typically includes situations such as natural disasters (like hurricanes, earthquakes, or floods), political upheaval (such as war or government actions), or other unforeseeable events that prevent a party from fulfilling their obligations under the contract.

By including a Force Majeure clause in a contract, parties are protected from liability for non-performance due to these uncontrollable circumstances. It allows for a fair allocation of risk and helps both parties understand under what conditions they may be excused from their obligations without being held accountable for damages.

The other options, while they may represent significant issues in business dealings, do not fall under the protections afforded by a Force Majeure clause. Minor contractual disputes, economic downturns, and unforeseen financial difficulties generally arise from business risks that parties are expected to manage, rather than from extraordinary external events. Therefore, these factors are not typically covered by the provisions of Force Majeure.