Will this force-majeure clause excuse our performance in Maine?
Only to the extent the clause's own words say so, and the party invoking it carries the burden. In 55 Oak Street LLC v. RDR Enterprises, Inc. the Law Court held that "[a] force majeure clause is a provision in a contract providing that certain supervening events may excuse a party's performance obligations", that "[w]hether a force majeure clause applies to excuse a party's performance depends on the clause's language", and that "[u]nless otherwise indicated by the contract, the party seeking to have its nonperformance excused by the force majeure clause bears the burden of proof". The Court vacated a judgment for a tenant whose rent had been partly excused, because the District Court "read the lease's force majeure clause as partially excusing RDR Enterprises' obligation to pay rent and concluded that RDR Enterprises did not breach the terms of the lease. This conclusion, however, is contrary to the unambiguous terms of the lease", and remanded for entry of a writ of possession for the landlord. For a sale of goods the answer is different, and the statute requires proportional performance rather than forbidding it. 11 M.R.S. § 2-615(1) excuses "[d]elay in delivery or nondelivery in whole or in part by a seller who complies with subsections (2) and (3)" where performance "has been made impracticable by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the contract was made" or by good-faith compliance with a governmental regulation or order, and subsection (2) then says that where the cause "affect[s] only a part of the seller's capacity to perform, he must allocate production and deliveries among his customers", while subsection (3) requires seasonable notice of the delay and of the buyer's estimated quota.
The trap
The Maine trap is proportional relief, and it runs in opposite directions for a lease and for goods. For a lease: a clause drafted in the usual all-or-nothing form ("[n]either party hereto will be liable for any failure to comply or delay in complying with its obligations hereunder") does not authorise a court to discount the rent to the fraction of capacity the event left. That is what 55 Oak Street reversed. Read that holding narrowly, though: the tenant there "did not pay any of the rent owed", and the Court's own footnote says that "even if the concept of a partial excuse for nonperformance were applicable, nothing in the lease's force majeure clause—or any other part of the lease—indicates that the obligation to pay the amount due under the lease would be completely discharged when part of the tenant's duty to pay rent is excused". So Maine has not held that partial excuse is unavailable; it has held that this lease did not provide for it and that paying nothing was a default. If partial or pro-rata relief is what the parties want, the clause has to say so. For goods the Code goes the other way: a seller who wants § 2-615's excuse MUST allocate among customers when only part of its capacity is hit and MUST give seasonable notice, so refusing to supply anyone is not a safe course; and on receiving notice of a material delay or an allocation the buyer may "[t]erminate and thereby discharge any unexecuted portion of the contract" or take its quota in substitution, with the contract lapsing as to affected deliveries if the buyer does not modify "within a reasonable time not exceeding 30 days", and § 2-616(3) says those provisions "may not be negated by agreement" except where the seller assumed a greater obligation. Note also that 55 Oak Street decided the case on the clause's language and expressly did NOT reach whether the force-majeure event proximately caused the failure to pay, so Maine's causation requirement is not settled by the decisions read; and § 2-615 runs to a seller of goods, not to a buyer's payment obligation.
14 authorities
The words that state the rule
A force majeure clause is a provision in a contract providing that certain supervening events may excuse a party’s performance obligations.
The words that state the rule
Whether a force majeure clause applies to excuse a party’s performance depends on the clause’s language.
The words that state the rule
Unless otherwise indicated by the contract, the party seeking to have its nonperformance excused by the force majeure clause bears the burden of proof.
The words that state the rule
The District Court denied Oak Street’s complaint because it read the lease’s force majeure clause as partially excusing RDR Enterprises’ obligation to pay rent and concluded that RDR Enterprises did not breach the terms of the lease. This conclusion, however, is contrary to the unambiguous terms of the lease.
The words that state the rule
Our conclusion that Oak Street is entitled to possession of the property is further supported by 10 the fact that RDR Enterprises did not pay any of the rent owed. The language of the lease unambiguously provides that a failure to pay rent constitutes grounds for default of the lease. This means all the rent due. Hence, even if the concept of a partial excuse for nonperformance were applicable, nothing in the lease’s force majeure clause—or any other part of the lease—indicates that the obligation to pay the amount due under the lease would be completely discharged when part of the tenant’s duty to pay rent is excused by a force majeure event.
The words that state the rule
The entry is: Judgment vacated. Remanded to the Superior Court for remand to the District Court for entry of a judgment issuing a writ of possession to 55 Oak Street LLC.
- statute11 M.R.S. § 2-615enactment date not established
The words that state the rule
is not a breach of his duty under a contract for sale, if performance as agreed has been made impracticable by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.
- statute11 M.R.S. § 2-615enactment date not established
The words that state the rule
Where the causes mentioned in subsection (1) affect only a part of the seller's capacity to perform, he must allocate production and deliveries among his customers but may at his option include regular customers not then under contract as well as his own requirements for further manufacture. He may so allocate in any manner which is fair and reasonable.
- statute11 M.R.S. § 2-615enactment date not established
The words that state the rule
The seller must notify the buyer seasonably that there will be delay or nondelivery and, when allocation is required under subsection (2) , of the estimated quota thus made available for the buyer.
The words that state the rule
Neither party hereto will be liable for any failure to comply or delay in complying with its obligations hereunder if such failure or delay is, including but not limited to, due to acts of God
The words that state the rule
Because we conclude that the District Court erred as a matter of law in interpreting the contract, we need not reach this argument.
- statute11 M.R.S. § 2-615enactment date not established
The words that state the rule
Except so far as a seller may have assumed a greater obligation and subject to section 2‑614 on substituted performance (1). Delay in delivery or nondelivery in whole or in part by a seller who complies with subsections (2) and (3) is not a breach of his duty under a contract for sale
- statute11 M.R.S. § 2-616enactment date not established
The words that state the rule
Where the buyer receives notification of a material or indefinite delay or an allocation justified under section 2‑615 , he may by written notification to the seller as to any delivery concerned, and where the prospective deficiency substantially impairs the value of the whole contract under the provisions of this Article relating to breach of installment contracts ( section 2‑612 ), then also as to the whole (a). Terminate and thereby discharge any unexecuted portion of the contract; or (b). Modify the contract by agreeing to take his available quota in substitution.
- statute11 M.R.S. § 2-616enactment date not established
The words that state the rule
If after receipt of such notification from the seller the buyer fails so to modify the contract within a reasonable time not exceeding 30 days, the contract lapses with respect to any deliveries affected. (3). The provisions of this section may not be negated by agreement except in so far as the seller has assumed a greater obligation under section 2‑615 .
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.