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2020-03-11 05:47:57

FM Event - Foreseeability

Can someone please clarify for me:

Australian Jurisdiction

Where, in a FM clause, it defines an event which does not constitute Force Majeure as "any circumstance which is reasonably foreseeable" is this interpreted to mean:

(a) "any circumstance which is reasonably foreseeable (at the commencement of the contract)"; or
(b) could it be read to mean that, at the time of applying for relief under FM, the event must not have been reasonably foreseeable?

Thank you.
 •  Victorian Rail Track (VicTrack)  •   2020-04-01 04:48:08
Hi - at my workplace we are mainly dealing with FX related claims that are being submitted as force majeure. In these cases, they are (b) - in that did the party have an opportunity prior to the FM event occurring to reasonably speaking, manage and treat the risk.
 •  BT  •   2020-04-29 14:33:13
! disclaimer - I don't know anything about Australian law !

but I don't see how option a) can be reasonable.

Risks can appear as time goes by due to changing circumstances and something that is not reasonably foreseeable at one point in time could well be later on.
 •  World Commerce & Contracting  •   2020-05-05 07:35:51
My apologies for the delayed reply to your question.

In general, the clause is referring to an issue that you could reasonably have anticipated and therefore could have prepared for it in some way. That means not only before inception of the contract, but also during its performance.

Even in a case where Force Majeure applies, there is a duty to take reasonable measures to mitigate its effects.

In the case of the pandemic, there are many debates over whether and in what circumstances it represents a Force Majeure event. However, even when disallowed, there may be grounds for claiming frustration of contract or impossibility of performance due to related events.
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