What is Force Majeure? And why is it now being mentioned in the context of Brexit?

18th May 2021

A historian of ideas – probably Isaiah Berlin – once averred that most philosophical systems were ultimately simple affairs.

What made them complicated, it was said, were the elaborate defences and anticipations of objections so as to make the arguments advanced harder to attack or dismiss.

I have no idea if this is true, as I have no head for philosophy, but I have often thought the same can be said for contracts.

Most agreements are also relatively simple – and most of us, every day, enter into oral contracts which are nothing more than ‘I give you [x] in return for [y]’.

Written out, such contracts would not need to be longer than one sentence – a single clause.

What makes a legal agreement complicated – and what can make a written contract go on for hundreds of pages of clauses and schedules – are the provisions dealing with what will happen if one party does not do [x] or the other party does not do [y].

This is because most written contracts are not there for when things go well: they are there for when things go badly.

The more provisions that are in a contract, the more allocations of risk and protections for the parties if there are problems.

For high-value or significant agreements, teams of lawyers will painstakingly (and often expensively) go through every possible and foreseeable eventuality, and will then allocate risk accordingly as between the parties.

There will also be detailed provisions setting out the processes for resolving and remedying problems.

In most circumstances, those provisions will not ever be used.

(As a general though not universal rule, the more effort that goes into putting a contract together, the less scope for genuine disputes later.)

But sometimes a thing can happen to disrupt an agreement that has not been addressed in the agreement.

This disruptive event can have three qualities: (1) it will be outside the control of the parties (else all you would have is a potential breach); (2) it will be outside of the allocations of risk in the agreement (else the agreement already deals with what will then happen); and (3) it will affect the performance of obligations under the agreement (else it would not matter).

In legal language, such a disruptive event is said to ‘frustrate’ the agreement.

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In English contract law, such frustrations often lead to unfair and uncertain results – and every law student will know of the so-called ‘coronation cases’.

Lawyers elsewhere, however, approached this sort of predicament differently and developed the doctrine of ‘force majeure’.

A force majeure event is a thing that (1) is outside the control of the parties; (2) is outside of the allocations of risk in the agreement; and (3) affects the performance of obligations under the agreement.

If the doctrine applies there is then some certainty of what will then happen in the event of a force majeure event – sometimes the consequences can be agreed between the parties, or the consequences may be provided for under the general law.

Force majeure, however, is a residual thing – if the parties have foreseen the particular risk and allocated that risk then the terms of the agreement should take priority.

This means (generally) the more detailed the agreement, the more limited the scope for force majeure.

The analysis set out by me above is from the perspective of an English commercial lawyer but the doctrine also exists in what is called ‘public international law’ – that is the law that regulates relations between countries (and also international organisations):

You will see the public international law document quoted provides that a thing cannot be a force majeure event if (a) it is because of the conduct of the state seeking to rely on it and (b) the risk of it happening has not been allocated.

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What all this means is that it is often difficult in practice to rely on force majeure when there is in place a detailed and specially negotiated agreement.

This is because the parties will have foreseen and addressed most practical problems.

And even if there is a force majeure event, that also does not mean it is a ‘get out of an agreement free’ card – as all that may result is a temporary relief from fulfilling an obligation until the force majeure event is over.

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The reason why force majeure is in the news is because David Frost, the United Kingdom minister responsible for Brexit negotiations, appears to think that force majeure can be relied on to relieve the United Kingdom from its obligations under the Brexit withdrawal agreement and its Northern Ireland protocol.

The news report says:

‘Force majeure is a legal concept through which a party can demand to be relieved of its contractual obligations because of circumstances beyond its control or which were unforeseen.

‘The suggestion is contained in a 20-page letter the UK has sent to the European Commission.’

To which the response should be: good luck with that.

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In practice, any reliance on the doctrine of force majeure by the United Kingdom will come down to two particulars: (1) what is the (supposed) particular force majeure event, and (2) what is the particular obligation that is (supposedly) affected by that event.

Until this is known, one cannot be completely dismissive.

But.

It is difficult to believe that there is any event that (1) affects the performance of a particular obligation under the Northern Ireland Protocol which (2) is not within the control of one of the parties and (3) is not addressed in the protocol.

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And in response to the thread on Twitter on which this blogpost was based, this scepticism was endorsed by Jonathan Jones, who was the United Kingdom’s chief legal official during the Brexit negotiations:

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That the United Kingdom government had not thought through or cared about the detail of the withdrawal agreement was not unforeseeable.

It was, to use another technical legal term, bleedingly obvious.

It is difficult to conceive of anything that could be a force majeure event that is not already subject to the provisions and processes of the Northern Ireland Protocol.

On the face of it, therefore, the resorting to ‘force majeure’ by the United Kingdom looks desperate – a makeweight argument deployed for want of anything more compelling.

There is, however, the delicious legal irony in the circumstances of the United Kingdom seeking to rely on a French legal doctrine used to cure the inadequacies of English law-making.

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‘An uncomfortable chair’ – why the international trade secretary wrongly believes trade deals are quick and easy, and why this false belief matters

22nd April 2021

One of the consequences of politicians not having careers before entering parliament is that ministers can be over-influenced by unusual experiences.

For example, as home secretary Theresa May and her advisors had the benefit of the ‘pick-and-choose’ approach to European Union justice and home affairs matters, where the United Kingdom had a number of opt-outs.

And so when May and those advisors were translated to 10 Downing Street it appeared that they believed that the same à la carte approach could be taken to the single market in the Brexit negotiations, unaware that the European Union would instead have a more of an ‘all-or-nothing’ approach.

Similarly the current international trade secretary Elizabeth Truss has been misled by her experiences to date into thinking international free trade deals are easy.

This is because in the immediate post-Brexit period it was possible to ‘rollover’ a number of existing trade deals between the European Union and (so-called) third countries, almost on a ‘copy-and-paste’ basis.

 

Such a formative experience would also be informed by the basic error of post-2016 governments of the United Kingdom that Brexit itself was a quick and easy task.

But.

There is a significant difference between continuing with an existing trade arrangement and putting in place an entirely new free trade agreement from scratch, especially with another major economy.

The slowness, however, is a surprise and a disappointment to the current international trade secretary, who is a politician in a hurry.

And so we get this preposterous news story.

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‘…an uncomfortable chair’

The only normal reaction to the detail of this excruciating news story is to cringe with sheer embarrassment. 

(By the way, the use of ‘allies’ as a plural means that the pronouns for the ‘source’ are the less-revealing they/them – which are presumably the international trade secretary’s preferred pronouns.)

Of course, this daft intervention has not gone unnoticed by Australia.

Perhaps the ‘allies’ of the international trade secretary did not believe that these comments would ever reach the Australians.

Silly them.

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The serious point here is, well, about the lack of seriousness.

The United Kingdom needs to be taken seriously as a party to international agreements in this new, lonely post-Brexit period.

Yet the United Kingdom seems no closer to getting why this important.

We have a prime minister who is loudly and publicly denouncing as ‘ludicrous’ the very arrangements in respect of Northern Ireland that resulted from his own change of policy, which he negotiated and signed, and for which he campaigned for and won an electoral mandate before rushing into law.

There seems to be an unawareness that the world is watching these antics.

And although they may ‘play well’ to domestic political and media constituencies, that is at a cost to the United Kingdom’s interests as an actor on the international stage.

The prime minister and he international trade secretary need a period of reflection about these counterproductive utterances and gestures.

Perhaps they should sit down, and think hard about what they are doing for a few hours.

Perhaps, even, in an uncomfortable chair.

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