Civil unrest and the contractual application of force majeure

During July 2021, and seemingly initiated by the arrest of the former President, Jacob Zuma, South Africa experienced an elevated degree of civil unrest throughout many parts of Gauteng and Kwa-Zulu Natal. Whilst the full economic impact of these events is presently unclear, there is little doubt that business operations across the country have suffered significant losses, with one inauspicious consequence of many companies being unable to fulfill their contractual obligations. In this context, it is useful to consider the concept of force majeure and the contractual application of these clauses.

Force majeure clauses are regularly included in commercial agreements and serve to provide parties with some level of protection against certain events which, at no fault of their own, render contractually obligated performance impossible. These clauses are ordinarily invoked following the occurrence of an “Act of God”. This is commonly understood and interpreted as an event such as a natural disaster but can apply equally to national crises and, most pertinently, circumstances such as civil unrest, depending on the specific clause. A party who successfully invokes a force majeure clause will either be temporarily or permanently released from their contractual obligations and accordingly may escape legal liability that would otherwise arise in respect of breach of contract.

Notwithstanding the above, it is important to take cognisance of the fact that force majeure clauses are not automatically read into commercial contracts and should not be confused with the common law principle of “supervening impossibility”. Furthermore, these clauses can be defined in both a broad and narrow sense, with only certain specified events being encompassed in their scope of application. On this basis, whilst many companies may be able to rely on force majeure as a means of relief from the recent unrest, this is by no means a guarantee, and success will wholly depend on the circumstances of each case.

We trust that you found this article informative, please email info@hjw.co.za for any contractual assistance in light of the recent unrest.

This article is provided for informational purposes only and should not be substituted for legal advice on any specific matter. Any opinions expressed herein are subject to the law as at the time of writing and will change in accordance with any change in the law. We recommend that you contact HJW Attorneys at info@hjw.co.za directly for advice applicable to your specific matter.