Force Majeure Clause May Be Unreliable If Circumstances Are Within Reasonable Control

• Published date: 10 July 2020
• Law Firm: Veale Wasbrough Vizards
• Author: Mr Paul Gershlick

Force majeure clauses have risen from ignored boilerplate clauses to top of the agenda due to coronavirus (COVID-19). The High Court has ruled against a party looking to rely on a force majeure clause...

... despite the express mentioning of the actual type of event (riot) within the clause.

The Contract

In the case of 2 Entertain Video Ltd v Sony DADC, the parties entered into a contract for Sony to provide warehousing and logistics services for 2EV's home entertainment business. Sony was storing a large amount of stock. During the 2011 London riots, rioters launched petrol bombs and the warehouse including all the contents burned down. Sony's insurers paid out '40m for the stock that was lost. 2EV also claimed for its loss of profits.

What Did the Contract Say?

There were two relevant provisions:

One was for force majeure, providing the following: "Neither party shall be liable for its failure...