Cases of Force Majeure in Procurement

Is your force majeure clause adapted to your business? What risks do you face?

In the past, force majeure was a simple contract where everyone agreed on its terms. The idea was something like this: “Of course, Mr. Supplier, if you ever suffer damage caused by a hurricane or a terrorist attack, a case that happens every thirty-six of the month, then we accept the delay in deliveries.”

But recently, cases of force majeure are no longer so rare.
Buyers who used to take force majeure lightly now require supplies on time.

Therefore, we suggest that you take into account the following criteria the next time you have to negotiate a contract/force majeure clause:

• Will you be ready to renounce exclusivity clauses on your suppliers in a case of force majeure?
  You will still have to accept deliveries and payments for the quantities ordered. But if your management decides that it is better to buy additional quantities from another supplier during the contract period, you should have the right to do so.

• Will you still have the status of “best customers” after negotiating with other suppliers?
  Some businesses sometimes negotiate a guarantee to get the best price among all suppliers' customers. But obtaining rare/difficult to obtain products will first be the priority in case of force majeure.

• Did your supplier send you a plan B for each case described in the Force Majeure clause?
  Your best weapon as a buyer is to plan various contingency plans if the supply chain is cut off, directly with your supplier in order not to multiply contacts and maintain a privileged relationship.