What procurement should learn from recent force majeure disputes

Disruptions post-COVID, the Red Sea crisis, and war zones have made force majeure a flashpoint. Use recent examples to unpack clause misinterpretations and proactive drafting practices.

Disruption isn’t the exception anymore. It’s the pattern.

From COVID lockdowns and the Russia–Ukraine war to Red Sea blockages and rising tensions in the Middle East and Asia, supply chains are under constant strain. And one clause is now at the center of it all: force majeure. Procurement leaders aren’t asking if a disruption will happen. They’re asking when—and how exposed they are. Over the past few months, leading enterprises have taken a hard look at their contract templates and supplier agreements. What they’ve found? Most force majeure clauses were either too vague to enforce or too outdated to offer real protection. This guide breaks down five critical aspects of force majeure clauses that require immediate attention, along with best practices from leading procurement teams who’ve redefined how they manage disruption risk.

Force Majeure clause checklist

1. Specificity of Events

Does your clause clearly define what counts as force majeure?

Look for:
✔ Mention of events like war, sanctions, embargoes, pandemics, cyberattacks, or government actions
✔ Clarity on whether inflation, tariffs, or cost escalation alone qualify

Best practice:
A global automotive manufacturer created a living annex of recognized high-risk events (e.g., sanctions, conflicts), updated quarterly with mutual sign-off. No renegotiation needed, just real-time alignment.

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2. Performance Obligations

What exactly is excused, and what isn’t?

Look for:
✔ Whether force majeure applies only to delivery, or also to pricing, penalties, and volume commitments
✔ Explicit treatment of inflation-related performance issues

Best practice:
A consumer goods company now separates delivery delays from pricing changes. If a supplier wants to raise prices, they must share cost breakdowns and market data to justify it, ensuring inflation isn’t used as a blanket excuse.

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3. Notice Periods

Are suppliers obligated to notify you, and by when?

Look for:
✔ Defined timeframes for notice (e.g., within 3–5 business days)
✔ Requirement for written documentation or proof

Best practice:
A global retail firm introduced a tiered notice system: initial notice within 72 hours, followed by formal proof within 7 days, making relief claims traceable and time-bound.

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4. Mitigation Requirements

Is your supplier required to explore alternatives before invoking relief?

Look for:
✔ Language requiring suppliers to explore alternate routes, sources, or fulfillment methods
✔ Proof of mitigation efforts before invoking the clause

Best practice:
An electronics firm requires suppliers to list backup routes or sources before the contract is signed. If suppliers later claim disruption, they must show both alternates failed first, helping avoid premature disruptions.

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5. Termination Rights

Do you have a clear path to exit if disruptions drag on?

Look for:
✔ Defined timelines for when either party can terminate
✔ Provisions to suspend obligations or source alternates

Best practice:
A global energy firm added a 30-day “step-in” clause. After 30 days of non-performance, the buyer can procure elsewhere for 90 days, recovering cost differences, before formal termination is triggered.

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Takeaway for procurement leaders

Force majeure is no longer fine print. It’s a frontline control mechanism.

With climate shocks, geopolitical risks, and trade volatility on the rise, procurement leaders must treat force majeure as a strategic lever, not just legal language. The clauses you revise today could determine your ability to respond tomorrow.

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