Events in the Middle East have thrown many global supply chains into disarray.

Major shipping companies have halted all transits through the Strait of Hormuz and suspended Suez Canal routings, with many container ships currently stuck in the Gulf. 

All of this is likely to have significant knock-on effects, creating bottlenecks in ports around the globe.

If your supply chains are affected, your contracts may, or may not, offer protection. Now is the time to dig out your force majeure clauses and scrutinise them carefully.

If you're entering new agreements, we'd strongly recommend building in robust protections from the outset.

What is force majeure?

Force majeure refers to unforeseen events beyond a party's control that prevent contractual performance. Under English law, force majeure has no automatic legal meaning; its scope depends entirely on what the contract says. Without such a clause, a party seeking relief must rely on the common law doctrine of frustration, which sets a much higher bar: performance must be genuinely impossible. (See our Digital, Commerce & Creative 101 for more information on force majeure).

To invoke a force majeure clause, the affected party bears the burden of proof and must usually notify the other side promptly while taking reasonable steps to mitigate the disruption.

A reminder of what businesses should do now

• If you're negotiating contracts now, consider whether armed conflict, acts of war, and government-imposed restrictions (including port closures) are expressly listed. Check whether relief extends to circumstances that make performance commercially impractical, not just physically impossible.
• If you're looking at contracts that have already been negotiated, check whether your force majeure clause actually covers these events. Review any notice requirements and time limits. If you miss these, you may lose your right to claim relief entirely. Identify whether there's a duty to mitigate, and start documenting every step you take.
• Critically, bear in mind that force majeure generally requires the event to be unforeseeable. If the conflict in the Middle East is ongoing at the time of contracting, it's likely that it won't qualify as force majeure in a newly negotiated agreement, as both parties are taken to have accepted that risk. To address this, consider including express language disapplying any foreseeability requirement, or specifying that escalations, specific consequences, or knock-on effects of known events (such as particular port closures or the suspension of specific shipping routes) will nonetheless trigger relief.
• If you explore workarounds or alternative arrangements with your counterparty, such as substitute suppliers, alternative shipping routes, or revised delivery schedules, ensure that any agreement is recorded in writing. A verbal understanding or informal exchange of emails may not be sufficient to vary the original contract terms. Document precisely what has been agreed, including any changes to price, timing, specifications, or allocation of additional costs. This will help avoid disputes later about what was agreed and whether the original contractual obligations have been modified or merely suspended.