Force Majeure Clauses in Australian Contracts

What is force majeure in Australian contract law?

A force majeure clause is a contractual provision that suspends, excuses or ends a party's obligations if a defined event beyond their reasonable control prevents, hinders or delays performance. In Australia, unlike some civil law jurisdictions, there is no statutory or common law right to force majeure relief — you get exactly and only what your contract gives you.

The related but different doctrine of frustration operates at common law and terminates a contract automatically when performance becomes impossible or radically different from what was agreed. Frustration is a narrow, high-bar doctrine — force majeure is what you draft in to fill the gap.

Force majeure vs. frustration vs. hardship

• Force majeure — contractual; the trigger events and consequences are whatever you agree to write in.
• Frustration — common law; automatic termination; very narrow (radical change in obligations, not mere hardship).
• Hardship / material adverse change — contractual; usually triggers renegotiation, not suspension.

What a force majeure event typically covers

• Natural disasters — fires, floods, cyclones, earthquakes, storms
• Pandemics, epidemics and government-imposed lockdowns
• Acts of war, terrorism, sabotage and civil unrest
• Industry-wide strikes and lawful industrial action
• Major utility failures, blackouts and telecommunications outages beyond the party's control
• Compliance with a new law or government order that makes performance illegal
• Embargoes, sanctions and export restrictions

What force majeure typically does NOT cover

• General downturns or unfavourable market movements
• Increases in the cost of raw materials, labour or fuel
• Currency fluctuations
• The party's own financial difficulties or insolvency
• Foreseeable events that could reasonably have been mitigated or worked around
• Failure of a subcontractor (unless the subcontractor's failure was itself caused by a force majeure event)

Did COVID-19 count as force majeure?

Sometimes. Australian courts assessed COVID-19 force majeure claims on the exact wording of each clause. Where the clause listed "pandemic" or "government-imposed shutdown", relief was generally available for the period the party was actually prevented from performing. Where the clause listed only natural disasters or war, relief usually failed. Increased cost or inconvenience — as opposed to prevention — was almost always rejected. The lesson: specificity of drafting wins.

Drafting a force majeure clause that actually protects you

A robust Australian force majeure clause should contain, at a minimum:

1. A definition of force majeure events — use "including, but not limited to" and list categories, then add a catch-all ("any other event beyond the reasonable control of the affected party that could not have been reasonably foreseen or mitigated").
2. A causation test — the event must actually prevent, hinder or delay performance (be careful — "prevent" is a higher bar than "hinder").
3. A notice obligation — usually written notice within a specific number of days, with particulars of the event and its expected duration.
4. A mitigation obligation — the affected party must take reasonable steps to work around the event and resume performance.
5. Consequences — obligations are suspended (not extinguished) for the duration of the event.
6. Payment obligations — usually carved out; you can't use force majeure to avoid paying money you already owe.
7. A long-stop termination right — either party can terminate if the event continues for a set period (typically 30, 60 or 90 days).
8. No liability for the suspended obligations during the event, but a reservation of rights for pre-existing breaches.

Sample structure

A well-drafted clause typically follows this structure:

• Clause 1 — Definition of "Force Majeure Event"
• Clause 2 — Notice requirement (7 days written notice with reasonable detail)
• Clause 3 — Suspension of affected obligations
• Clause 4 — Mitigation and updates
• Clause 5 — Termination right after 60 days
• Clause 6 — Consequences of termination (no penalty; parties pay for work actually performed)

Force majeure in specific industries

• Construction contracts (AS 4000, AS 2124, GC21, PC1) — force majeure typically gives an extension of time but rarely additional payment. See our comparison of AS 4000 vs AS 2124.
• Supply and services contracts — the balance between "suspend" and "terminate" depends on how time-sensitive the goods are.
• Commercial leases — force majeure interacts with rent abatement clauses; see our guide on rent abatement in commercial leases.
• Government tenders — Commonwealth and state contract templates have prescribed force majeure wording. See our guide to Australian government tenders.

Frequently asked questions

Is force majeure implied in Australian contracts?

No. There is no general force majeure doctrine in Australian law. If the contract doesn't include a force majeure clause, a party generally cannot claim force majeure relief — although the narrower common law doctrine of frustration may occasionally apply.

Does force majeure excuse payment of money?

Usually no. Most force majeure clauses expressly carve out payment obligations. A pandemic or natural disaster doesn't stop money changing hands electronically, so courts treat payment as capable of being performed regardless of the event.

Who has the burden of proving force majeure?

The party seeking relief. They must prove the event, its causal link to non-performance, that they gave the required notice, and that they took reasonable steps to mitigate.

Can I add force majeure to an existing contract?

Yes, by variation — but both parties must agree. If the counterparty is unwilling, you cannot unilaterally impose one.

How long can a force majeure event suspend performance?

Only for as long as the event actually prevents performance. Most clauses also include a long-stop — commonly 30, 60 or 90 days — after which either party can terminate.

Get a force majeure clause reviewed or drafted

Envision Legal drafts and reviews force majeure clauses across supply, services, construction, procurement and long-term commercial contracts. If you're about to sign — or about to invoke a clause — get it stress-tested first.

This article contains general information only and does not constitute legal advice. Envision Legal accepts no liability for any loss arising from reliance on this content. You should seek independent legal advice tailored to your specific circumstances. For enquiries, contact Envision Legal.