Force Majeure

Notes

1 Some may think that English law would be reluctant to incorporate any principles derived from French law, no matter how sensible, useful or popular these may be.

2 Tandrin Aviation Holdings Ltd v Aero Toy Store LLC [2010] EWHC 40 (Comm), [2010] 2 Lloyd’s Rep 668, at para [43].

3 Lebaupin v R Crispin & Co [1920] 2 KB 714, (1920) 4 LL L Rep 122.

4 For a list of cases, see H G Beale, Chitty on Contracts (32nd edn, Sweet & Maxwell 2015) para 15–63.

5 ibid paras 15–162 to 15–163.

6 This reflects a principle of English construction known as ‘ejusdem generis’, meaning ‘of the same kind’, i.e. where general wording follows a list of specific items and is intended to expand on the specific examples, such general language will be limited to including only other matters ‘of the same kind’. See further Chitty on Contracts (n 4) paras 13 090 to 13 093.

7 See for example Larsen v Sylvester & Co [1908] AC 295, HL, where the House of Lords held that the phrase ‘… frosts, strikes … and any other unavoidable accidents or hindrances of what kind soever …’ displaced the ejusdem generis rule and covered delays caused by a shipping block at the loading port. See also Chandris v Isbrandtsen-Moller Co Inc [1951] 1 KB 240, [1950] 2 All ER 618, (1950) 84 Ll L Rep 347, where Devlin J held that the words ‘or other dangerous cargo’, which followed a specific list consisting of ‘acids, explosives, arms or ammunition’ were not to be applied restrictively according to their similarity to the listed items because there was nothing in the document that showed an intention to limit them.

8 Channel Islands Ferries Limited v Sealink UK Ltd [1998] 1 Lloyd’s Rep 323: ‘it is important in my view to bear in mind … that it is for the party relying on the force majeure clause to bring itself squarely within that clause’.

9 Agrokor AG v Tradigrain SA [2000] 1 Lloyd’s Rep 497.

10 Persimmon Homes (South Coast) Ltd v Hall Aggregates (South Coast) Ltd and Anor [2009] EWCA Civ 1108, [2009] NPC 118.

11 See Chitty on Contracts (n 4) para 24–007.

12 For example in Tradax Export SA v Andre & Cie SA [1976] 1 Lloyd’s Rep 416 it was held that strict compliance with notice provisions was a condition precedent to a notice being effective. In Mamidoil Jetoil Greek Petroleum Co SA v Okta Crude Oil Refinery AD (No 3) [2002] EWHC 2210 (Comm) [2001] 1 Lloyd’s Rep 1 at first instance a requirement to give ‘prompt notice’ was considered (although obiter) as a condition precedent. The appeal did not turn on the ‘prompt’ point, so no view was given on appeal.

13 Mamidoil-Jetoil v Okta [2003] EWCA Civ 1031, [2003]2 Lloyd’s Rep 635.

14 [1988] 1 Lloyd’s Rep 323.

15 ibid 327.

16 On express terms see further below paras 15.53 ff.

17 B & S Contractors and Design Ltd v Victor Green Publications Ltd [1984] ICR 419 (CA): ‘The party seeking to rely on [the force majeure event] must show that its consequences could not have been avoided by taking such steps which were reasonable in the particular circumstances.’

18 Trade and Transport Inc v Iino Kaiun Kaisha [1973] 1 WLR 210. A party would be debarred from relying on a force majeure clause if the existence of the facts which show that the clause was bound to operate should reasonably have been known to that party prior to the entry into the contract. There are doubts whether this is correct see (Chitty on Contracts (n 4) at para 15–155), but it is clear the cases turn on what the parties agreed should be treated as a force majeure event. In this case the court found that ‘unavoidable hindrances’ did not include foreseeable hindrances.

19 The Joint Contracts Tribunal, which publishes a range of contracts appropriate to different procurement methods used in the construction industry.

20 See, for example, the General Conditions of Contract for Construction produced by LOGIC (Leading Oil and Gas Industry Competitiveness, set up in 1999 by the UK Oil and Gas Industry Task Force), which provides for an adjustment to and revision of the Schedule of Key Events in the event of ‘force majeure occurrence’ (LOGIC Edition 2: October 2003).

21 If the extension of time claim is used additionally to support a claim for disruption costs, it will be necessary to check the re-planned programme against actual progress see ch 8 on delay and disruption. This should produce the same result as a retrospective analysis; see Walter Lilly & Co Ltd v Mackay & DMW Ltd [2012] EWHC 1773 (TCC), [2012] BLR 503.

22 This reflects the general law which provides that: ‘… clauses of this kind have to be construed upon the basis that those relying on them will have taken all reasonable efforts to avoid the effect of the matters set out in the clause which entitle them to vary or cancel the contract’. See B & S Contractors and Design Ltd v Victor Green Publications Ltd (n 17) at page 426 (Griffiths LJ). This was cited with approval in Channel Islands Ferries Limited v Sealink UK Ltd (n 8).

23 Thames and Mersey Marine Insurance Co v Hamilton, Fraser & Co (The Inchmaree) (1887) 12 App Cas 484; Compania Naviera Aeolus SA v Union of India [1964] AC 868.

24 The duty of mitigation imposes an obligation to take only steps which a reasonable and prudent man would ordinarily take in the course of his business. See Shindler v Northern Raincoat Co Ltd [1960] 1 WLR 1038, [1960] 2 All ER 239.

25 Payzu Ltd v Saunders [1919] 2 KB 581, at 588.

26 Lesters Leather Co v Home Overseas Brokers Ltd (1948) 64 TLR 569, (1948–1949) 82 Ll L Rep 202.