Force Majeure Clause

A force majeure clause suspends or limits a firm's obligations when something outside its reasonable control stops it performing them — a natural event, an act of government, industrial action, war or civil disorder, or the failure of communications, power or a third party the firm depends on. It is not a promise that nothing will go wrong; it is the agreement about who carries the consequences when it does. It is worth separating from the market disruption clause it usually sits beside, because the two answer different questions. Market disruption is about the market becoming unquotable while the firm still functions. Force majeure is about the firm's own ability to perform at all, which is why the listed triggers are largely infrastructural rather than financial. The practical content is in the consequences: whether obligations are suspended or extinguished, whether positions may be closed and on whose valuation, how the client is notified when the notification channel is part of what failed, and whether a suspension that runs long enough allows either side to end the agreement.