What is the primary benefit of including a force majeure clause in a contract?

Including a force majeure clause in a contract primarily serves to excuse nonperformance due to unforeseen events that are beyond the control of the parties involved. These events can include natural disasters, acts of war, or other significant incidents that prevent one or both parties from fulfilling their contractual obligations. By recognizing these unpredictable circumstances, a force majeure clause provides a legal safeguard for parties, allowing them to navigate situations where performance is rendered impossible or impractical.

This provision is essential in contract management because it helps to mitigate risks associated with unforeseen circumstances. Without such a clause, a party might face liability for failing to meet contractual obligations due to reasons that were not anticipated at the time the agreement was made. Therefore, the value of a force majeure clause lies in its ability to allocate risks appropriately between the parties and provide a clear framework for what happens in extraordinary situations.