(Un)reasonable endeavours: force majeure clauses and offers of non-contractual performance

In its recent decision in MUR Shipping BV v RTI Limited, the Supreme Court held that the answer to this question was “no”, finding that the Appellant was not obliged to accept an offer by the Respondent to pay in euros where the contract provided for payment in USD.

While the court’s decision may provide parties with greater certainty when it comes to force majeure clauses, this certainty arguably comes at the expense of a “business common sense” approach, and leaves open the possibility that a contract may be suspended or terminated even where a force majeure event could have been overcome by acting reasonably.

In an article published with Vasanti Selvaratnam KC and Kaity Crowe in Butterworths Journal of International Banking and Financial Law, we explore how the decision has important repercussions for parties who are drafting force majeure clauses or considering whether to accept an offer of non-contractual performance following a declaration of force majeure, and discuss how the Supreme Court’s decision shows less flexibility toward the issue than other common law jurisdictions and does not sit comfortably with English jurisprudence on the interpretation of commercial contracts.

Download a copy of the article (free) from the JIBFL website