In many civil law jurisdictions, Force Majeure is an implied term defined in local law and read into the contractual relationship. In the United States (and in common law jurisdictions generally), a Force Majeure clause must be an express clause in the contract.
In most states (including New York and Delaware), a court typically will find a Force Majeure to exist if the clause specifically references the event that transpired. Force Majeure clauses can vary greatly in their drafting. They typically refer to events such as war, family, floods, earthquakes, strikes, fire, terrorist attacks, “acts of God”, and government action. Some clauses refer to epidemics, illness, disease and similar; many do not. And some clauses include catch-all language, defining a Force Majeure event also to include events like those listed in the clause and which are outside the parties’ control.
Hardship is not generally recognized under US law. Rather, most states in the U.S. recognize common law doctrines of impossibility (or impracticability) and frustration of purpose. Impossibility typically requires the party invoking the defense prove the following elements: (1) an unexpected intervening event occurred; (2) the parties’ agreement assumed the event would not occur; and (3) the event made contractual performance impossible or impracticable. Nonperformance will not be excused if the risk was foreseeable when the contract was entered into or if nonoccurrence of the event was not a basic assumption on which the contract was made.
Frustration of purpose focuses on whether the event at issue has obviated the purpose of the contract. The doctrine requires many of the same elements as impossibility or impracticability but does not require a supervening event that impedes performance. The inquiry is more based on whether the party invoking the defense can show that performance of the contract in light of the unforeseen event would no longer fulfill any aspect of its original purpose.