Force majeure clauses are a bit like the fire extinguisher in your office – you hope you never need it, and most of the time, you forget it’s there. That is, until there’s a fire. Or a global pandemic. Or a war. Or⌠a sudden wave of tariffs.
Force majeure provisions often get little attention during contract negotiations, taking a back seat to pricing, milestones, and limitation of liability. But when crises hit – everyone rushes back to the contract to ask: âDoes this clause cover this?â
Do the tariffs imposed during President Trumpâs administration qualify as a force majeure event?
What Is Force Majeure?
A force majeure clause excuses performance under a contract when an extraordinary event or circumstance beyond the control of the parties prevents one or both from fulfilling their obligations. The clause is meant to allocate risk – and its effectiveness depends entirely on how it’s drafted.
There is no âuniversalâ definition of force majeure in common law. Courts look to the actual language in the clause.
Do Trump-Era Tariffs Qualify?
It depends on the wording.
-
Narrow, Enumerated Clauses
âForce majeure shall include acts of God, war, riots, floods, earthquakes, or other natural disasters.â
Under this language, tariffs probably donât qualify. This type of clause lists specific events (mostly natural or violent), and courts may interpret catch-all terms like âor other causesâ to mean âsimilar in nature to the ones listed.â Tariffs? Not so similar to earthquakes.
-
Broader Clauses Including âGovernment Actionâ
âForce majeure shall include any law, regulation, or government action that materially affects performance.â
Tariffs could qualify. Tariffs are imposed via government action and can directly affect the cost and feasibility of performance (especially in supply-chain contracts). If the clause is broad enough to include âgovernment regulationâ or âgovernment interference,â you may have a stronger argument.
-
Catch-All âBeyond the Partyâs Controlâ Language
âAny event beyond the reasonable control of the affected party.â
Tariffs might qualify, depending on the context. Courts may scrutinize foreseeability here – more on that below – but in general, this kind of clause gives the most flexibility.
Foreseeability
Even with broad wording, a key question is: Was the event foreseeable?
At common law, if a risk was foreseeable (and not addressed in the contract), courts may be reluctant to excuse performance. The Trump administration signaled tariffs in advance, and businesses could argue the risk was not only foreseeable but also assumable.
This doesnât kill a force majeure argument – but it does weaken it, especially in contracts signed after the tariffs were announced.
Notice, Mitigation, and Other Requirements
Even if tariffs do qualify under your clause, youâre not automatically off the hook. Most force majeure provisions impose procedural obligations like:
- Notice: Often within a specified timeframe (e.g., 5-10 days after becoming aware of the event).
- Mitigation: You typically must try to reduce or work around the impact (e.g., finding alternate suppliers or routes).
- Resumption of Performance: Some clauses require parties to resume performance as soon as the force majeure condition ends.
Failure to comply with these obligations can void the excuse – even if the event otherwise qualifies.
Bottom Line
Tariffs imposed by the Trump administration might qualify as a force majeure event – but only if the clause is broad enough and the parties didnât sleep on their procedural duties. As always in contracts, the words you choose matter.
Next time you see a force majeure clause during negotiations, give it the attention it deserves – before the next âunforeseeableâ event proves itâs not boilerplate after all.
If you need assistance drafting your business contracts, contact a lawyer at Galkin Law to discuss your specific situation.