Which statement about force majeure is true?

• A. It is a standard risk factor that is always manageable within the contract
• B. It is a clause that guarantees performance regardless of events
• C. It is a penalty for non-performance
• D. It is an extraordinary event beyond control that may excuse performance or grant extensions

Answer: (D)

Force majeure covers extraordinary events beyond a party’s control that can excuse or delay performance under a contract. When such events occur—like natural disasters, war, government actions, epidemics, or severe strikes—the affected party may be released from liability or granted an extension, depending on the contract’s terms. It’s not about guaranteeing that performance will happen regardless of circumstances, nor is it a penalty for non-performance. It’s a relief mechanism for events that are unforeseen and outside the party’s ability to prevent or handle, often with requirements to give notice and to mitigate the impact. This is why the statement describing force majeure as an extraordinary event beyond control that may excuse performance or grant extensions is the right interpretation.