The top six alternatives to invoking Force Majeure on major contracts

Round-table on 17th April 2020

Key Takeaways from the Round-table

1. The FORCE MAJEURE “refresher” round-table held last 9th April 2020 is available through the PASA ‘Resource Centre’ part of the website to all members – includes slides

2. For any Force Majeure clause to work well, it needs the ‘agreement’ of both parties – at least one of whom has to be incapacitated.

Without a FM clause in the contract, using “no capacity” to perform as an essential to form a valid contract is possible in some circumstances.

3. The best use of any FM clause is often to use it as leverage to negotiate a win/win outcome under new circumstances … eg:

  • Pausing supply lines
  • Re-agreeing retainers
  • Changing insurance covers
  • Re-agreeing costs for underused assets
  • Changing volumes
  • Property lease negotiations
  • Service contracts changes

Several examples were offered by the team on the session:

4. The procurement role was clearly more tactical at the current time – almost purchasing again

5. Virtual site visits with suppliers have proved possible for some

  • Keeping perspective on suppliers’ needs is also key:
  • Use two-way communication
  • Build supplier empathy – especially for SMEs
  • Work to build goodwill now
  • Keep long term view in mind

How do you want to be remembered post crisis?

6. Critical v non-critical focus is an important segmentation now

7.This time can also work for other work eg; renovations whilst quiet – an opportunity with smaller suppliers perhaps?

8. Internal ‘marketplaces’ for redeploying staff to other functions – could this be extended to suppliers too?

9. Many procurement terms of trade can be carried or negotiated to help manage non (on lesser) performance during a crisis

Eg: term, time, delivery dates, volumes, exclusivity, insurances, price, costs, and many others

10. What other “BOILER PLATE” terms of contract might have been overlooked in previous deals other than FM – that might prove helpful in future?

About the Round-table

Force Majeure is an option all parties are no doubt considering to null contract obligations due to COVID-19. However, is it the best option? Or the right option?

The procurement challenge right now is to secure vital supply lines and pause discretionary supply. Procurement may also become involved in negotiations and/or seeking new supply for if providers invoke Force Majeure because they are unable to deliver contract requirements.

Before anyone hits that Force Majeure red button, what can be done instead to get through these extraordinary times?  A crucial question is, how do we preserve relationships for later when we may need extra help to restart in a less competitive market with far less certainty than ever before?

Explore the answers and define the top six alternatives in this interactive online PASA Connect Round-table with Dr Sara Cullen, of the University of Melbourne and The Cullen Group, who will introduce and facilitate the discussion, leveraging off the questions raised in a previous PASA Connect online webinar - The Force Majeure refresher, with Aspect Legal on 9th April at noon (SYD).

Your Expert Lead

Dr Sara Cullen of the University of Melbourne and The Cullen Group is the pre-eminent national expert on contract management and will facilitate this discussion personally. 


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Keywords contracts, coronavirus, covid 19, force majeure, major contracts
Category N/A
Topic / Interest Force Majeure
Type Virtual Round-table Recording
Role N/A
Date Entered 17/04/2020