There was a feeling of strong indignation when the scheduled game between Scotland and Japan in this year’s Rugby World Cup was threatened with cancellation due to the threat of Typhoon Hagibis. Such cancellation would have meant the Scottish team being eliminated from the competition. This caused outrage amongst fans and various sources reported that the Scottish Rugby Union (SRU) had sought legal advice and was considering taking action in the event that the match did not go ahead.
Under the tournament regulations, which in fact resulted in Italy being eliminated when their match against New Zealand in Toyota fell victim to the forecast typhoon, if a pool game is called off it cannot be rescheduled to another day. Along with the other 19 teams the (SRU) signed the Rugby World Cup 2019 terms of participation which clearly stated in Section 5.3 “Where a pool match cannot be commenced on the day in which it is scheduled it shall not be postponed to the following day, and shall be considered as cancelled.”
In a statement the World Cup governing body said “the core principle that could enable us to explore a departure from the terms of participation is a fair and consistent application of the rescheduling for all teams in a safe environment for teams, fans and essential match services. The sheer predicted scale and impact of the typhoon and the complexity of team movements for eight matches, meant that an even-handed application was just not possible without putting safety at risk.”
It is not clear what legal advice was given to the SRU but it is understood that their position was that the tournament rules preventing the match being postponed did not apply due to the inclusion of a force majeure clause in the documentation governing participation in the world cup.
In the end the match was played, Scotland were beaten and had to go home and the legal question regarding the significance of a force majeure clause in a contract and the potential consequences when a party seeks to rely on it was not determined.
A force majeure is a common clause in contracts that essentially frees parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, strike, riot, crime or an event described as an act of God such as a hurricane, flood, earthquake, volcanic eruption, etc prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party’s non-performance entirely, but only suspend it for the duration of the force majeure. Sometimes force majeure clauses allow termination of a contract, if the intervening event continues for a specified period of time.
Why are such clauses so important? Contracts are legally binding agreements to perform legal obligations. When a contact says you do something then you have to do it. When you do not perform as required it is a breach of contact. However, if there is a force majeure clearly defined in the contract and this event occurs, then the party that would be in breach gets forgiveness from performance.
There are many examples of commercial disputes relating to the invocation of a force majeure clause following the occurrence of an event which was beyond anyone’s control and one party refuses to accept it as a basis for non- performance of the contract . In such cases it will be necessary to consider the wording of the clause and the particular circumstances which have arisen.
Although the likelihood of having to invoke such a clause is very low the consequences of doing so are significant and parties to a contract may avoid dispute if they take care that there are clear provisions in the contract about what will happen in the event that the unlikely occurs.