April 2025 saw the US announce wide-ranging tariff measures, quickly followed by retaliatory steps from other countries. The knock-on effects have been swift: falling oil prices, downgraded economic forecasts, and volatile currency markets. This turbulence has put pressure on commercial contracts, with Force Majeure clauses back in sharp focus.

Force Majeure Under English Law

Unlike in some jurisdictions, Force Majeure is not a general legal doctrine under English law. Its use depends entirely on whether, and how, it is drafted into the contract.

A well-drafted Force Majeure clause typically lists triggering events like natural disasters, war, or “events beyond reasonable control”. But to rely on Force Majeure, a party must show that:  

• A specified Force Majeure event has occurred;

• That event directly and causally prevented performance; and

• Performance was rendered impossible, not merely more expensive or commercially impractical.

Tariffs that increase the cost of imports are unlikely, in isolation, to trigger Force Majeure protection. However, if they cause supply chain collapse, regulatory barriers, or other knock-on effects covered by the clause, there may be scope for relief.

Drafting with Purpose in a Volatile Market

In this climate of uncertainty, generic Force Majeure language will rarely suffice. Businesses negotiating new contracts should:

• Refer directly to tariffs, trade restrictions, or supply chain disruptions;

• Include economic thresholds for when Force Majeure can be triggered; and

• Defining procedural requirements clearly, particularly around notice, mitigation, and duration of relief.

However, Force Majeure should not be treated as a one-size-fits-all solution. In many cases, bespoke provisions, like pricing adjustments or risk-sharing clauses, offer better protection.

Reviewing Existing Agreements: What Now?

For contracts already in force, the precise wording of the Force Majeure clause is critical. Relief will only be available if the economic or legal consequences of recent tariff changes fall squarely within the clause’s defined scope.

In rare cases, parties may explore the doctrine of frustration, though under English law, it sets a high bar and is rarely upheld by the courts. Where legal remedies fall short, a commercially negotiated resolution may offer a more practical path forward. In all cases, early engagement and proactive risk management remain the most effective defences.

To manage risk effectively and maintain contractual resilience in a volatile trading environment, businesses should:

• Review existing Force Majeure clauses to ensure they are clearly drafted, appropriately scoped, and procedurally compliant;

• Assess the practical impact of tariff changes and trade measures on contractual performance and obligations;

• Proactively allocate tariff and regulatory risk in new agreements through tailored drafting;

• Consider hybrid mechanisms that blend legal safeguards with commercial flexibility, such as renegotiation triggers, pricing adjustments, or risk-sharing frameworks.

Conclusion

In an increasingly unpredictable global trade landscape, businesses must remain both agile and well-informed. While Force Majeure clauses can play a critical role in managing disruption, their effectiveness hinges on precise drafting and practical deployment. Smart drafting, early risk management, and practical planning are the best defence against disruption.

Need Support? Our Commercial Team can help you review your contracts, manage risk, and implement solutions tailored to your business needs.

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