Force Majeure Clauses and Their Legal Effect Under Nigerian Law
Introduction
Commercial contracts are often negotiated on the assumption that parties will be able to perform their obligations as agreed. However, unforeseen events may arise that make performance difficult, delayed, or impossible. To address such risks, parties commonly include force majeure clauses in their contracts. In Nigeria, force majeure clauses play an important role in allocating risk and protecting parties from liability where extraordinary events beyond their control interfere with contractual performance.
This article examines the meaning of force majeure, the legal basis of force majeure clauses, the instruments in which they are found, and their legal effect under Nigerian law, with reference to judicial decisions.
Meaning of Force Majeure
Force majeure refers to an extraordinary event or circumstance beyond the reasonable control of the parties, which prevents, hinders, or delays the performance of contractual obligations. The expression is derived from French law and means “superior force.” In contractual usage, it describes events that are neither caused by nor attributable to the fault or negligence of the affected party.
Typical force majeure events may include natural disasters, war, civil unrest, epidemics, government actions, or other supervening events that could not reasonably have been anticipated at the time the contract was entered into. The precise scope of force majeure, however, depends entirely on the wording of the contract.
Force Majeure as a Contractual Concept in Nigeria
Under Nigerian law, force majeure is not a general doctrine that applies automatically to contracts. It is purely contractual in nature and only applies where the parties have expressly provided for it in their agreement. Nigerian courts have consistently held that force majeure derives its force and effect solely from the intention of the parties as captured in the contract.
Where a contract does not contain a force majeure clause, a party cannot rely on force majeure as a defence to non-performance. In such circumstances, the only possible relief may arise under the common law doctrine of frustration, which operates under different principles and has different legal consequences.
Contracts that requires Force Majeure Clauses
Force majeure clauses are commonly found in a wide range of commercial and transactional instruments. These include construction contracts, engineering and procurement contracts, supply and distribution agreements, oil and gas contracts, power purchase agreements, real estate development agreements, international trade contracts, and long-term service agreements.
In regulated sectors such as oil and gas, infrastructure, and energy, force majeure clauses are particularly important due to the high level of exposure to regulatory intervention, government actions, and external disruptions. In international contracts, force majeure clauses also serve to align contractual obligations with global risk-allocation standards.
Legal Basis of Force Majeure Under Nigerian Law
The legal foundation of force majeure in contracts rests on general principles of contract law, particularly the doctrine of freedom of contract. Once parties freely agree to include a force majeure clause in their contract, the clause becomes binding and enforceable in accordance with its terms.
Because force majeure is contractual, Nigerian courts adopt a strict interpretative approach. Courts will not expand the meaning of force majeure beyond what the parties have expressly agreed, nor will they imply events into the clause that are not clearly contemplated.
Force Majeure and the Doctrine of Frustration
Force majeure should be clearly distinguished from the doctrine of frustration in a contract. Frustration is a common law principle that applies where a supervening event occurs after the formation of the contract and renders performance impossible, illegal, or radically different from what the parties originally contemplated.
Unlike force majeure, frustration does not depend on the existence of a contractual clause. Once established, frustration automatically discharges the contract and brings it to an end. Force majeure, on the other hand, usually suspends performance or excuses liability temporarily, unless the contract expressly provides for termination.
Because frustration has a more drastic legal effect, Nigerian courts apply it narrowly and only in exceptional circumstances.
Conditions for the Application of a Force Majeure Clause
For a party to successfully rely on a force majeure clause in a contract, the event relied upon must fall within the scope of events expressly stated or reasonably contemplated in the clause. The event must be beyond the control of the affected party and must not result from that party’s own fault, negligence, or deliberate act.
In addition, the force majeure event must have a direct impact on the performance of the contractual obligation. Mere inconvenience, increased cost, or reduced profitability does not amount to force majeure unless the clause expressly provides otherwise.
Most force majeure clauses also impose procedural requirements, such as prompt notification to the other party and an obligation to take reasonable steps to mitigate the effects of the event. Compliance with these requirements is essential, as failure to do so may prevent a party from relying on the clause.
Legal Effect of Force Majeure Clauses
The legal effect of a force majeure clause depends on how it is drafted. In most cases, the occurrence of a force majeure event excuses the affected party from liability for non-performance for the duration of the event. Performance obligations may be suspended, and timelines for performance may be extended.
Some force majeure clauses provide that where the event continues for a specified period, either party may terminate the contract. In such cases, termination is not automatic but arises from the contractual right created by the clause.
Importantly, force majeure does not invalidate the contract unless the agreement expressly provides for termination. Rights and obligations that are not affected by the force majeure event may continue to subsist.
Judicial Treatment of Force Majeure in Nigeria
Nigerian courts have consistently affirmed that force majeure clauses must be strictly interpreted. In Globe Spinning Mills Nigeria Plc v. Reliance Textile Industries Ltd, the Court of Appeal held that force majeure is entirely dependent on the contractual agreement of the parties and can only be invoked in respect of events contemplated by the contract.
The court emphasised that parties seeking to rely on force majeure must bring themselves squarely within the terms of the clause and demonstrate that the event genuinely prevented performance. The decision reinforces the position that courts will not presume force majeure or extend its application beyond the clear intention of the parties.
Drafting Considerations and Practical Implications
Careful drafting of force majeure clauses is essential for effective risk management. It is important that parties clearly define qualifying events, specify notice requirements, and outline the consequences of force majeure on performance, timelines, and termination rights.
It is also advisable to address whether government actions, regulatory changes, epidemics, or supply chain disruptions are covered, especially in long-term or cross-border contracts. Clear drafting reduces uncertainty and minimises the risk of disputes when unforeseen events occur.
Conclusion
Force majeure clauses serve as an important contractual mechanism for managing unforeseen risks in commercial transactions. Under Nigerian law, force majeure has no automatic application and depends entirely on the express agreement of the parties. Its scope, operation, and legal effect are determined strictly by the wording of the contract and enforced by Nigerian courts in line with established principles of contract law. Proper drafting and strict compliance with contractual requirements are therefore critical to successfully invoking force majeure relief.