The construction industry is always known to be a complicated and fragmented industry, where external factors that are beyond the control of the parties involved or are independent of the construction works, can cause problems to the progress and/or cost of the work. Risk is one of these external factors that can pose significant threats and uncertainties to the construction project. Foreseeable risks can be tackled through the proper application of risk management. However, the same cannot be said for unforeseeable risks. Are force majeure clauses the answer to address this problem?
In this article, we aim to provide an understanding of force majeure and its application in tackling these unforeseeable risks. Although force majeure clauses are common in standard forms of construction contracts, they are frequently misunderstood by the Malaysian contractors due to the rarity of such events happening in Malaysia. However, this clause is pertinent, particularly for construction projects outside of Malaysia.