When Does a Force Majeure Clause Excuse Performance in Texas?

Force majeure is whatever the contract says it is

Texas courts treat a force majeure clause as an ordinary contract term. There is no background Texas rule that excuses a party when something unexpected happens; the scope of the excuse is set entirely by the words the parties chose. The Texas Supreme Court applied that approach in 2023 in Point Energy Partners Permian v. MRC Permian, reading an oil and gas lease's force majeure clause by its terms and holding that it did not reach a delay the clause's language did not cover. The practical rule for a business is simple: the clause is the law of the deal, and the first job is to read it slowly.

Most clauses have four moving parts, and a dispute usually turns on one of them.

• The listed events. Acts of God, fire, flood, war, terrorism, strikes, government orders, epidemics. An event that is named is covered; an event that is not named is covered only if a catch-all phrase reaches it.
• The catch-all. Phrases like "or any other cause beyond the party's reasonable control" extend the clause to unlisted events. Texas courts read a catch-all in light of the listed events and often require that the unlisted event be of the same general kind, and some courts of appeals have required that it be unforeseeable when the contract was signed. A specifically listed event does not have to be unforeseeable.
• The effect required. Some clauses excuse performance that is "prevented"; others reach performance that is "hindered," "delayed" or "made impracticable." A supplier whose costs doubled was not prevented from performing, and a clause that requires prevention will not help it.
• The procedure. Written notice within a stated number of days, a duty to mitigate, a duty to resume performance when the event ends, and sometimes a right to terminate if the event lasts beyond a set period.

Causation: the event must be why you did not perform

The event must actually cause the failure. A party that was already behind, or that would have failed for its own reasons, cannot use a storm or an order that arrived afterward. Point Energy turned on this: the delay there resulted from the operator's own scheduling choices rather than from the event it pointed to, so the clause gave no excuse. Expect the other side to ask for the records that show what was happening before the event, and keep them.

Causation also has an edge in time. The excuse lasts as long as the event prevents performance and no longer. Many clauses say so expressly; where they do not, a court will still ask when performance became possible again.

Economic hardship is not force majeure

The most common failed force majeure claim is an economic one. Prices rose, a subcontractor quit, a customer canceled, the deal became unprofitable. Texas courts do not treat changed economics as an excuse unless the clause names market conditions, and most do not. A clause that excuses "inability to obtain materials" may reach a true shortage, but it rarely reaches materials that are available at a higher price. The party that signed a fixed-price contract took the risk of the price.

What if the contract has no force majeure clause?

Then the fallback is narrow. Texas recognizes the common-law excuse of impossibility, sometimes called impracticability, when performance is made impossible by the death or incapacity of a necessary person, the destruction of a thing necessary for performance, or a change in law that prohibits performance. Courts apply it sparingly and do not extend it to performance that became more expensive or more difficult. For a sale of goods, Business and Commerce Code section 2.615 excuses a seller's delay or non-delivery when performance has been made impracticable by a contingency whose non-occurrence was a basic assumption of the contract, or by good-faith compliance with a government regulation, provided the seller seasonably notifies the buyer and allocates any remaining capacity fairly among customers. Section 2.615 opens with the words "except so far as a seller may have assumed a greater obligation," so a seller who promised to deliver regardless of events has given up the excuse.

Notice and mitigation: where good claims are lost

A clause that requires written notice within a set time means it. A party that invokes force majeure by phone, or weeks late, may lose an excuse it otherwise had. The notice should identify the event, the obligations affected, the expected duration and the steps being taken to limit the effect. Where the clause requires reasonable efforts to overcome the event, document those efforts as they happen: alternative suppliers contacted, shipping routes tried, partial deliveries offered.

Example

Suppose a Fort Worth manufacturer has a 12-month fixed-price contract to deliver components monthly to a Dallas assembler. In month four, a new tariff raises the cost of the manufacturer's raw material by 40 percent, and it sends a letter declaring force majeure. The clause lists "acts of God, war, terrorism, strikes, fire, flood, and governmental orders prohibiting performance," and excuses performance that is "prevented" by a listed event. The tariff is a governmental act, but it does not prohibit performance; it raises its cost. Delivery is still possible. The clause requires prevention, and nothing prevented the manufacturer from buying the material and shipping the parts. The force majeure claim fails, and the manufacturer's refusal to deliver is a breach. Had the clause excused performance "hindered or made commercially impracticable" by "changes in law or tariffs," the analysis would be different, which is the whole point: the words decide.

If you receive a force majeure notice

• Read the clause and compare each requirement with the notice: Is the event listed or within the catch-all? Did the notice arrive within the time allowed? Does it say how the event prevents performance?
• Ask for particulars in writing. A party relying on force majeure should be able to say what it cannot do, why, and until when.
• Reserve your rights. Accepting late or partial performance without a written reservation can be argued later as a waiver or a modification.
• Mitigate your own position. If the clause lets you source elsewhere or terminate after a stated period, decide early whether to use it.
• Look at your other remedies. In a sale of goods you may demand adequate assurance of performance under section 2.609; in any contract a clear refusal to perform may be a repudiation, covered in what to do when the other side says it will not perform.

If you want to invoke it

Match the facts to the clause before sending anything. Confirm the event is listed or within the catch-all, that it caused the failure and not merely coincided with it, and that you can document both. Give the notice the clause requires, in the form and within the time it requires, and keep performing every obligation the event does not affect. Where the clause allows suspension rather than termination, do not announce a termination; a termination the clause does not authorize is a breach, as explained in whether a company can terminate a contract early. A party whose claim fails has not just lost an excuse; it has usually admitted non-performance in writing.

Drafting the next contract

Disputes about force majeure are mostly disputes about drafting. The clause should list the events that matter to the business, including pandemics, cyberattacks, tariff or sanction changes and supplier failures if those are real risks, and should say whether it reaches performance that is hindered or only performance that is prevented. It should state the notice period, the duty to mitigate, how long a suspension can last before either side may terminate, and what happens to payments already made. An agreement reviewed with these questions in mind will usually avoid the lawsuit. Tina Wysk represents Dallas businesses on both sides of force majeure and non-performance disputes, including the supply and services agreements where these clauses are tested.