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hatrack

(59,442 posts)
Thu Aug 6, 2020, 08:07 AM Aug 2020

What Happens To Business Contracts During Climate Disasters? Force Majeure Clauses May Not Work

Increasing numbers of new contracts are now being written with the coronavirus pandemic in mind, and climate change should get the same treatment, said Kirkland & Ellis LLP partner Alexandra Farmer. "Contractual precedent will not change overnight," she wrote in an email, "but particularly for material contracts with longer time horizons, we should be thinking now about how to thoughtfully reflect and allocate material climate risks."

Because force majeure may not apply to catastrophes induced by global warming — especially as those events become increasingly foreseeable — legal experts warn that climate-related calamities should be written into contracts to avoid legal battles during times of crisis.

EDIT

Gould & Ratner LLP partner Richard Reizen said he took care to tailor the force majeure clause and schedule in a California building contract to accommodate the increasingly strong super El Niño rain season. The approach was a pragmatic one, he said, given the data about the storms. He noted that beyond more specific force majeure language, the pandemic demonstrates why lawyers should be writing clear and specific terms in case of delays or project hiccups, which he noted have been the biggest issue in some construction disputes stemming from quarantine efforts. "I'm always amazed; most of the provisions we see are pretty standard," he said. "I haven't seen a huge shift, but I think the COVID situation may force that a bit."

Reizen said he's been "preaching" about climate change-specific contract language for a while, but he has so far seen little change. In states where successful force majeure arguments hinge on whether the event was "unforeseeable," Reizen said climate effects may be an even tougher sell. "We all know it's coming," he said. "We're all looking at the data; everybody recognizes sea levels are getting higher, temperatures are getting warmer, things of that nature.

EDIT

https://www.eenews.net/stories/1063680119

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What Happens To Business Contracts During Climate Disasters? Force Majeure Clauses May Not Work (Original Post) hatrack Aug 2020 OP
I predict insurance liability policies will severely limit their Act of God clauses, replacing them no_hypocrisy Aug 2020 #1
I really don't think "We had NO idea!" is going to hold up in court hatrack Aug 2020 #2

no_hypocrisy

(45,774 posts)
1. I predict insurance liability policies will severely limit their Act of God clauses, replacing them
Thu Aug 6, 2020, 08:22 AM
Aug 2020

with unavoidable climate change as an inevitability, not a surprise.

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