Been updating my standard engagement agreement template and wondering if anyone includes force majeure language. Thinking about situations like utility data system outages, natural disasters affecting client facilities, regulatory changes that impact audit scope. Had a case last year where Ameren Missouri had a 3-week system outage that delayed our audit by 2 months. Client wanted to terminate the agreement. Worth adding this protection?
Force majeure clause - worth including?
Elmer, I've had force majeure in my agreements for about 5 years now. Saved my bacon during the 2011 tornado outbreak here in Louisville. Had three clients whose facilities were damaged and audits had to be postponed indefinitely. The clause protected me from breach claims and allowed us to resume work when they rebuilt. I'd definitely recommend including it, especially with climate change making extreme weather more common.
I include force majeure but keep it pretty narrow - acts of God, government regulations, utility system failures beyond our control. Don't want it to be an excuse for every delay. CPS Energy here in San Antonio had a major billing system upgrade last year that shut down data access for 6 weeks. Force majeure clause let us extend the engagement timeline without penalty. Just make sure the language is specific about what qualifies.