Section 35 of the main agreement: Understanding the Importance for Your Business
As a business owner or operator, it is essential to understand the importance of all sections included within the main agreement. In particular, Section 35 – otherwise known as the force majeure clause – is a crucial element to consider. This section outlines the circumstances under which a party may be excused from the performance obligations outlined in the agreement.
During times of unforeseen events or circumstances beyond an individual’s control, such as natural disasters, war, or pandemics, Section 35 provides businesses with a level of protection. This clause has become especially relevant in recent years as we have seen the rise of unforeseen circumstances like the COVID-19 pandemic.
The force majeure clause allows a party to be excused from their obligations if fulfilling their duties has become impossible or unduly burdensome as a result of said circumstances. These events, as outlined in Section 35, must be beyond the party`s control, and they must have taken reasonable steps to mitigate or avoid the impact of the event.
For businesses, it is important to understand that the force majeure clause is not a catch-all exemption from contractual obligations. Rather, it is a clause designed to provide protection in extraordinary situations beyond the parties` control. For example, a construction company may be excused from completing a project on time if a natural disaster or other force beyond their control makes it impossible to do so.
However, it is essential to remember that the force majeure clause must be explicitly outlined in the contract and must apply to the specific event in question. Additionally, parties must take reasonable steps to mitigate the impact of the situation on their obligations. Failure to do so may result in liability, even if the force majeure clause applies.
In conclusion, Section 35 – the force majeure clause – is a crucial element to consider when creating or reviewing a business agreement. This clause provides businesses with protection in the event of unforeseen circumstances beyond their control that may hinder their ability to fulfill their obligations. Understanding the implications and limitations of this clause is essential for all parties involved in the agreement.