Force majeure clauses are vital in construction contracts, where delays and disruptions are common. These clauses offer protection when events outside a party’s control prevent contract performance.
In this article, our building and construction lawyers, explore how force majeure operates in Australian construction contracts, common events that trigger these clauses, legal considerations, and practical steps for contractors and principals.
Key Takeaways
Force majeure clauses protect construction parties from liability when unforeseen events prevent contract performance.
Not all construction contracts include force majeure clauses – standard forms like AS 4000 may require supplementary provisions.
Events such as extreme weather, pandemics, and government actions are commonly included in force majeure definitions.
Contractors must meet notice and documentation requirements to rely on a force majeure clause.
Clear drafting is essential – Australian courts apply these clauses strictly and won’t imply relief where it’s not stated.
What is Force Majeure in a Construction Context?
Construction projects are uniquely vulnerable to disruptions. Force majeure clauses in these contracts may cover:
Natural disasters (e.g., bushfires, floods, earthquakes)
Pandemic-related shutdowns (e.g., COVID-19)
Supply chain issues or material shortages
Labour strikes or industrial action
Government intervention or changes in law
These events can halt site access, delay deliveries, or make performance impossible. A well-drafted force majeure clause allocates the risk of these disruptions fairly.
New to force majeure? Read our general guide: What is a Force Majeure Clause?
Standard Clauses in Australian Construction Contracts
Not all construction contracts automatically include force majeure clauses. Here’s how some common contracts deal with it:
AS 4000 (Australian Standard): Does not explicitly use the term “force majeure” but includes extension of time clauses for events beyond the contractor’s control.
FIDIC: Includes specific force majeure provisions, often referred to as “Exceptional Events.”
GC21: Uses the term “Delay Event,” which can include force majeure-like circumstances.
These clauses may entitle a contractor to:
An extension of time to complete the works
Relief from liquidated damages
In some cases, termination of the contract
Drafting Considerations for Force Majeure Clauses
To ensure clarity and avoid disputes, force majeure clauses in construction contracts should:
List specific events relevant to the project (e.g. floods, site access restrictions)
Include notice requirements with timelines and documentation
Clarify entitlements, especially regarding time extensions and any cost relief (often excluded unless specifically stated)
Address foreseeability (and whether events must be unforeseeable)
Account for site-specific risks, like remote locations or seasonal hazards
Example: A contractor working in North Queensland should consider including monsoonal weather as a force majeure event.
Ensure the clause is balanced as overly one-sided terms may be challenged – Learn about unfair contract terms
How Courts Interpret Force Majeure in Construction
Australian courts interpret force majeure clauses strictly. Key principles include:
No implied force majeure: The clause must be expressly written into the contract.
Burden of proof: The party relying on the clause must prove the event occurred and made performance impossible or significantly delayed.
No relief for general hardship: Increased costs or minor delays usually don’t qualify.
During COVID-19, courts reinforced the importance of clear drafting, government lockdowns may be force majeure, but general commercial impact alone may not suffice.
Practical Tips for Contractors and Principals
To make force majeure clauses work effectively in construction contracts:
- Review during contract negotiation – don’t assume standard contracts cover all relevant risks.
- Tailor clauses to reflect the project’s location, scope, and likely risks.
- Provide timely notice if a force majeure event occurs.
- Keep detailed records of disruptions, including site diaries and correspondence.
- Consult legal and insurance professionals – some risks may be insurable even if not covered by the contract.
Protective Measures Under Australian Consumer Law
The Australian Consumer Law (ACL), part of the Competition and Consumer Act 2010, protects against unfair contract terms. Force majeure clauses that are overly broad or deny remedies to consumers may be deemed unfair and void. Businesses should ensure their clauses are reasonable and transparent to avoid legal challenges.
Frequently Asked Questions (FAQs)
What is considered a force majeure event in a construction contract?
A force majeure event is typically an unforeseeable, external event that prevents one or more parties from fulfilling their obligations, such as natural disasters, government-imposed restrictions, or supply chain interruptions.
Do standard Australian construction contracts include force majeure clauses?
Not always. For example, AS 4000 does not use the term “force majeure,” but allows extensions of time for certain uncontrollable delays. It’s important to add tailored clauses if needed.
Does a force majeure clause allow a contractor to claim extra costs?
Usually, force majeure clauses only provide time relief (not compensation for additional costs) unless the contract specifically allows it.
What should I do if a force majeure event occurs on my construction project?
You should promptly notify the other party in writing, provide supporting evidence, and follow the procedure outlined in your contract. Maintaining detailed records is critical.
Can a contract be terminated due to force majeure?
Yes, but only if the clause allows for termination after a prolonged force majeure event. Otherwise, parties must continue to perform once the event ends.
