Force Majeure to Apply Small Comfort to Some Crisis-Affected Contracts

This article addresses the ramifications of force majeure clauses if invoked by members of the energy industry who find themselves in such distress that they cannot fulfill their contractual obligations. Force majeure generally finds its rightful place within the friendly confines of the Uniform Commercial Code (UCC), and then within Article 2 thereof, dealing with contracts for the sale of goods between merchants. Specifically, Section 2-609 of the UCC addresses the rights of any party to a contract to seek adequate assurance of performance from the countervailing party. A force majeure clause is only as good as the calamities it anticipates. It can be said that few in the industry anticipated the hardships of the current environment. Therefore, and while unfortunate, it is highly unlikely that any current force majeure language will be sufficient to excuse a party from performance due to financial disaster of whatever kind, and the courts will undoubtedly not imply such downfalls into contracts already written.