Contractors and Force Majeure: Contractual Protection from Hurricanes and Severe Weather
This season is not special as hurricanes are a part of life on the east coast and gulf shores. From New York to Louisiana, just about every state has seen massive property loss from hurricanes during the past ten years.
We often see harsh outcomes for those on the coast living in finished homes. What happens to the unfinished and current projects awaiting completion? If you’re building on the coast, take a look at all of the following risk aversion mechanisms:
- Builders Risk Insurance is necessary as is Coverage for named storms. Be sure to review the “excluded perils” or speak to your agent as hurricane coverage best not be omitted.
Once you begin reviewing your current policy or engaging your agent, be sure to check for determination as to the extent of coverage for named storms. Your coverage should be reviewed for property and materials coverage, delay costs, and other particulars.
Force Majeure clauses are certainly familiar to you if you’re reading this. In your contract, there is no reason to rely on a generic definition. Include language which states hurricane, named storm, tropical storm etc within the force Majeure clause while making sure to include language “including but not limited to: hurricanes, severe tropical weather…”. Should you be forced to duke it out with the customer in a residential or commercial setting, you shall be well ahead of the game and might avoid a dispute over damages for delay or other contractual non-performance.
Force Majeure Contingency allocation. Since funds are typically withheld or placed on deposit for contingent events, you might well consider placing specific language entitling you to change order rights and other monetary backing to finish your job in a quality and timely manner.
Payment for Storage and Protection is a key consideration during a high impact storm. This should be included in your contract because the owner will deserve to have high cost materials shielded from the elements. Your contract should include a payment contingency for this as well as an accurate calculator.
Speak to your lawyer. If you have questions about this or other contractual issues, call your attorney and have a consultation.