Force Majuere

I. Introduction
In late 2008, lawyers for Donald Trump, the flamboyant American billionaire, invoked a force majeure clause set forth within a lease agreement in an effort to acquire a more favorable repayment schedule on over $600 million dollars of debt.   What was the justification?   According to court filings, the recent financial crisis amounted to an ‘an act of god’ warranting judicial intervention on the looming default.   The case was eventually settled out of court.   Not to be out done, a similar argument was raised in an English court by Aero Toy Store, a private jet aircraft sales company, in an effort to avoid forfeiture on a multi-million dollar deposit for the derailed acquisition of an aircraft.   In pertinent part, Aero Toy Store blamed the “"unanticipated, unforeseeable and cataclysmic downward spiral of the world's financial markets" as a force majeure event.   The court rejected the argument.   In the Middle East, a parade of force majeure claims filed by real estate developers to void payment obligations in the aftermath of the recession promoted Marwan bin Ghalaita, CEO of Dubai real estate watchdog RERA, to urged investors to ‘play the same game’ and observed: “If a developer can use [force majeure], why can’t I?”   The list continues, limited perhaps only by the advocate’s ingenuity and the facts at his or her disposal.

Raising a force majeure claim in reliance on the most recent (albeit extraordinary) financial crisis and its attendant recession is not a surprising tactic among parties fielding commercial transactions; to the contrary, using imaginative and opportunistic ways of applying theories of force majeure has become a hallmark of good business lawyers.   Leon E Trakman, Professor of Law at the University of New South Wales (and its former dean), noted the following in his research into the questionable use of force majeure within the oil industry:

In reality, many...