Key takeaways
Force majeure under English law
There is no concept of force majeure under common law. It is entirely dependent on contractual terms.
Reviewing contractual force majeure clauses
Businesses should check their contracts for force majeure provisions and establish their scope and requirements.
Relying on force majeure
The relying party should gather as much evidence as possible to substantiate its claim of force majeure.
Events since 28 February 2026 have presented further challenges to global trade.
Shipping traffic through the Strait of Hormuz has reduced significantly and damage to shore infrastructure has further affected energy supply chains. Against this backdrop, force majeure (FM) clauses are once more in the spotlight.
Summary of Strait of Hormuz situation as of 9 March 2026
As of 9 March 2026, traffic through the Strait of Hormuz, a narrow waterway approximately 30 miles wide that separates Iran to the north from Oman’s Musandam enclave and the wider Arabian Peninsula to the south, remains significantly reduced, with vessels holding position either side of the Strait.
Along with other locations, some commercial onshore facilities in the region, including oil refineries, export terminals and port storage facilities, have been damaged. While much commentary has been focused on the export of crude oil and related products through the Strait, the location is also important to the export of raw materials needed to manufacture fertilizers and the import of agricultural commodities for food and feed.
In the present situation, parties will need to understand their contractual and legal options and exposures where the performance of a contract is said to be adversely affected.
Overview of force majeure and frustration under English law
There is no self-standing principle of FM under English law. The concept is entirely dependent on contractual terms, the intention of which is to excuse one or both parties from failure or delay in the fulfilment of their obligations as a result of events beyond their control. Whether FM can be invoked depends, among other things, on the proper application of the contract terms, the factual context and the evidential position.
The closest English common law concept to FM is frustration of contract. Where a contract is 'frustrated', it is automatically discharged (essentially, automatically terminated). Frustration occurs where a supervening event, without the fault of the contracting parties, makes performance impossible because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the parties to the contract. This is a high threshold, and neither mere inconvenience nor increased costs will suffice to cross it.
Because frustration operates narrowly, the parties to sale contracts and contracts of carriage very often include FM clauses in an attempt to allocate risk. To the extent that a matter is covered by an FM clause, the law generally treats the doctrine of frustration as having been ousted by agreement. For that reason, we focus on FM in this article.
Relatedly, we have seen instances of parties amending standard contract forms to remove the FM provisions, sometimes in the belief that the law will step in to address events of FM. As above, that is not the case under English law – deleting the FM terms in a standard form without replacing them will leave the parties with the narrower doctrine of frustration, including exposure to the blunt outcome by which the contract is discharged where frustration occurs.
Rising use of force majeure clauses by commodities suppliers
Since the start of the most recent conflict on 28 February 2026, FM provisions have been invoked across a range of contracts. FM clauses are often, but not always, drafted in terms that provide greater protection to the seller or the shipper of the goods. The extent to which sellers can rely on FM clauses will depend on the wording and scope of the clause. Typically, FM clauses operate where performance of an obligation has been 'prevented' or 'delayed'. Some FM clauses set a lower bar, requiring the relying party merely to show that its performance has been 'hindered'. It is rare, but not unheard of, for FM clauses to be activated where performance has merely been 'rendered uneconomic', or similar.
In many cases, FM terms are incorporated by way of their inclusion in general terms and conditions (GTCs), which the parties have agreed are to form part of their agreement. For example, the BP Oil International Limited GTCs for Sales and Purchases of Crude Oil and Petroleum Products commonly feature in contracts for the sale of crude oil and its products, as do the Shell International Trading and Shipping Company Limited GTCs for Sales and Purchases of Products and Crude Oil and similar terms. These contain comprehensive, FM provisions. Similarly, dry-bulk contracts frequently incorporate standard contract terms that contain FM provisions or clauses to a similar effect, such as those published by the Grain and Feed Trade Association (GAFTA), the Federation of Oils, Seeds and Fats Associations (FOSFA) or the Refined Sugar Association (RSA). All these commonly feature in trades into and out of the region.
Generally, to rely on FM, parties will need to be able to establish that the event said to delay or prevent performance meets the circumstances expressly set out in the relevant FM clause. In RTI Ltd -v- MUR Shipping BV [2024] UKSC 18, the Supreme Court confirmed that the party relying on FM must also show that it took reasonable steps to avoid or mitigate the effects of the FM event. However, those reasonable steps do not oblige a party to tender or accept performance that is different from that which the parties have agreed on in their contract.
Where an FM clause is present, the party seeking to rely on it will usually be required to show that:
the triggering event or state of affairs was beyond its reasonable control; and
the affected party could not avoid the triggering event or state of affairs by taking reasonable steps.
If those requirements are not expressly agreed, they will normally be implied. The burden of proof is on the party seeking to rely on FM. The FM clause sometimes sets out the evidential requirements that must be met; if so, the effect of the clause might be that meeting those requirements is a condition of reliance on FM.
Most FM clauses impose strict notice requirements, often stipulating both the form and the timeframe within which notice must be given. Depending on the contract terms, proper notice may be a condition precedent to relying on FM and a failure to comply may result in the party losing the right to suspend or cancel performance, or becoming liable for breach of contract, even where a qualifying FM event has occurred. Particular care is needed where, as is often the case, a contract contains strict provisions governing the format and timing of notices given under it. While it is not always the case that a failure to give proper, timely notices will preclude reliance on FM, it is possible for that to be the result depending on the contract terms. The potential exposure is significant.
FM clauses offer varying remedies once FM has been validly triggered. These may include suspensions of performance for the duration of the FM event, automatic extensions of time for performance, and rights to cancel or terminate all or part of the contract if the FM event continues beyond a specified 'longstop' period. FM clauses typically excuse delay and non-performance, operating to limit or exclude liability accordingly. In contracts where the price is determined by reference to a benchmark at particular times, the contract wording might provide for adjustments to pricing to allow for performance that is delayed by FM; conversely, it might make clear that the original pricing terms are to be unaffected.
A party declaring FM without good grounds for doing so risks committing an anticipatory breach of the contract. Such breaches occur where a party shows an intention no longer to be bound by the contract, whether by refusing performance (renunciation) or by stating it will only perform on terms that conflict with those in the contract. This may entitle the counterparty to terminate the contract and claim damages. Therefore, parties considering declaring FM must be sure that they have carefully reviewed the contractual provisions to ensure that their declaration is valid and to avoid the risk of a termination alongside a claim for damages.
If faced with a declaration of FM from a supplier, parties in sale contract chains will need to consider the terms of their onward sale contract to check whether they can make a similar declaration to their own purchasers. In many cases, the fact that an intended supplier declares FM will not be sufficient to permit a declaration to be made down the contractual chain where alternative supplies might be available, even at great additional cost. Where there is no onward sale, the receiver of a cargo will likely need to examine declarations of FM closely and it might be necessary to determine at what point the receiver is free to seek alternative supply sources without risking a breach of the contract by prematurely terminating it or otherwise treating it as cancelled.
Important takeaways for clients to be aware of relating to force majeure
When faced with actual or potential impacts on contractual performance, the parties to sale contracts are recommended to take the following steps:
Review and understand your FM provisions now
Even if no impact has yet occurred, those whose trades might be affected by current events under English law governed contracts are well-advised proactively to review their agreements to confirm:
Whether an FM clause is included at all.
How an FM event is defined; some FM clauses lean towards events preventing the seller from effecting shipment or delivery at the loading port; others extend further and expressly refer also to the buyer’s obligations.
The kind of impediment for which the clause provides: is prevention necessary, or is delay or hindrance enough?
What notice and evidence requirements and consequences the clause provides for, not forgetting the notices provisions that might be found elsewhere in the contract or in the applicable GTCs.
Whether the events in question allow reliance on the FM clause and, if so, at what point can a declaration safely be made without committing an anticipatory breach of the contract?
What the position is under any on-sale agreements; are the contracts on back-to-back terms, or is there exposure from different provisions?
Maintain a bank of evidence of the FM event, and reasonable steps taken to avoid or mitigate the event
It is crucial to ensure the preservation or gathering of evidence to prove not only that the event has occurred, but also that it has prevented, delayed or hindered performance in accordance with the governing FM terms. This may include gaining official statements (e.g. from chambers of commerce or government sources), and exploring alternative load ports, routings, suppliers, logistical arrangements or storage solutions, but it does not require accepting a different form of performance from that which was contractually agreed.
Maintain effective communications
While it is important for a relying party to reserve its rights and avoid prejudicing its position, it is often prudent to keep contractual counterparties informed of developments. Doing so can reduce commercial friction, allow coparties and to manage their own commercial positions with third parties, and avoid the risk that silence or poor communication might give rise to a dispute. Some FM clauses contain positive obligations to keep the counterparty informed and to supply evidence on a rolling basis, non-compliance with which can prevent reliance on FM or at least give rise to a claim for damages.
Consider future contracts
When negotiating new contracts that could be affected by events in the region, it is good practice to pay close attention to the FM terms so that they are capable of responding as intended to potential developments. That includes ensuring alignment in the FM terms between contracts in chains, to avoid the common problem where an event amounting to FM under a supply contract cannot do so under the on-sale terms. Similarly, it is essential to ensure that notice periods align, ideally permitting longer periods of notice down the chain to account for last-minute notices received up the chain.
Conclusion
Often overlooked in negotiations, while problems might seem remote, FM clauses can have a great impact on the effect of an event that impacts on performance. The present situation in the Middle East is no exception. As with earlier geopolitical events, the impact on contracting parties will depend on the wording of their contracts and the application of the law to that wording.
Understanding the contractual position, even before performance is affected, will leave parties better placed to optimise their position or mitigate their exposure. Those who are prepared will anticipate the impact on their rights and obligations and be better able to position themselves to make, or respond to, a declaration of FM. The same understanding could reduce the risk that any ability to rely on FM is compromised, including through a lack of evidence or timely notice.
At the pre-contract stage, parties should ensure their terms include adequate and clear FM provisions. Where there is to be a contract chain, ensuring alignment between the FM terms in the supply contract and those in the on-sale contract could be crucial to the legal and economic outcome where performance is affected.
While FM is not confined to global events that top the news, those events are a reminder that FM terms can have a great impact on the liabilities and rights of contract parties. When situations develop, there is often little time to analyse their impact. Preparation will mitigate risk and allow the swift action that is so often needed when contractual performance is affected.
This article was co-authored by Trainee, Griff Gough-Walters.
