A Force Majeure clause in Oklahoma contracts is a basis some businesses turn to in hard times. Especially with the recent pandemic, many businesses have been looking to rely on force majeure clauses in contracts to get out of their obligations. But what exactly is a force majeure clause, how does it work, and can you get out of a contract by using it? In order to use a Force Majeure clause in Oklahoma as a contract defense the ordinal obligor must do certain things for the defense to be valid. As in most contracts the key is was it a properly drafted contract provision.
Force Majeure Clause in Oklahoma?
Force majeure clauses are also known as “Act of God” provisions. These clauses are usually included in contracts as part of the boilerplate legalese, and many people don’t think much of them when they read them or even bother reading the entire contract. However, these clauses can save a company hundreds, thousands, or even millions of dollars. With an international pandemic like COVID-19, force majeure clauses have become a popular topic. They are often found in construction contracts that may anticipate the possibility that the project can not be completed and also used a tool in mediation.
A force majeure clause in a contract allows a party to be released of their obligations under the contract if part of their performance becomes impossible for any reason outside the parties’ control. Depending on the contract, these clauses can list certain events that would be considered outside the power of the parties, or there can be general language about when the contract can be discharged.
How Does A Force Majeure Clause Work in a Business Contract?
A force majeure clause usually works as an agreement between the parties. Typically, the clause is in the contract that each party agreed to. Therefore, if an event occurs that is not in the control of either party – like a global pandemic, the parties can agree to discharge the contract. When the parties agree on their own to discharge the contract, the parties will usually come to an agreement that will allow each party to return to the place where they were before the start of the contract. In some cases, this means one party will refund the other party or enter into another agreement that is possible to perform.
Since the contracts that you enter in with a business is a legally binding agreements, if the other party refuses to allow you to discharge your obligations under the contract due to a force majeure situation, you can file a lawsuit against the other party and have a court enforce the force majeure clause. This approach will typically cost both parties more and will take more time. When you bring a lawsuit, it will also be up to the judge or the jury to determine if an “Act of God” really occurred and if the contract should be discharged.
Can You Get Out Of A Contract?
A force majeure clause will likely save the day on your business contracts when major disasters strike. Whether you run a large event with sponsorships, provide food and beverages for arenas, or supply tables and chairs for large outdoor festivals, you may need to use a force majeure clause. Many times when the events are held outside or are dependent on the weather, a force majeure clause will be beneficial for all the businesses involved.
Depending on your specific situation and the contract you have entered into, a force majeure clause may allow you to get out of a contract and no longer perform your obligations.
Tulsa Oklahoma Business Law Attorneys Near You
Are you unable to perform some of your obligations under a contract because of something outside your control? Are you looking to rewrite your contracts so you are protected in the case of another global health emergency? Our small business attorneys are experienced in helping you ensure you are protected and can use a force majeure clause if needed. The attorneys at Kania Law Office are ready to help you. Call (918) 743-2233 today to schedule your appointment or contact us online.