45.44 As exemplified by the fact that the enumerated lists in force majeure clauses are usually indicative rather than exhaustive,97 it is not possible to describe every potential impediment. Nevertheless some examples can be identified.98
45.45 The typical examples of impediments may be classified in several categories, such as natural phenomena and catastrophes. This includes events such as earthquake, flood, storm, drought, fire, frost, landslide, lightning, tidal waves, washout, freezing of lines,99 as well as epidemics.100 Terrorist 101 or pirate attacks and sabotage can also constitute impediments.102
(p. 660) 45.46 Armed conflicts and acts of war may amount to an impediment as well.101 This includes inter alia preparation for war, blockade, revolutions and the like, insurrection, mobilization, civil commotions, riots, invasion, act of a foreign enemy, and act of civil disobedience.102
45.47 Additionally labour disputes, such as strike, lock-out, boycott, go slow, occupation of factories and premises103 may amount to an impediment. In such situations, it needs to be carefully examined whether or not such event is to be qualified as beyond the control of the obligor.104 A strike or lock-out within the obligor’s business solely concerning the conditions of employment is part of the general personnel and business risk that the obligor typically has to bear.105 But it is also argued that the personnel risk is limited by the employer’s rights of management over his employees.106 On the contrary, general strikes, particularly those of a political nature may, may exempt the obligor.107
45.48 States may take interventions which could amount to an impediment as well, for example the imposition of an import or export ban. This example is however quite difficult to generalize, and there are differing views on whether such circumstances should trigger the exemption projection.108 It is the case that import and export bans are beyond the control of the parties, but the exemption may be denied on other grounds such as forseeability, or the contractual assumption of the risk.
45.49 A very similar situation arises where rather than imposing a ban, a government requests national producers to hand over to the government a particular quota for the goods for domestic use. At one time this occurred in Bolivia with respect to crude oil. The seller would have been legally able to perform its contract with the buyer; however it did not have sufficient quantities of crude oil to satisfy both the Bolivian government and the buyer. Furthermore, the option existed to pay a very severe penalty of USD 1,000,000.00 per day rather than comply with the government order. In this case an international arbitral tribunal exempted the seller from both its obligation and liability for non-performance.109
45.50 A related but slightly different situation is the denial or delay of import or export licences.110 While this issue would usually follow the analysis for import or export bans, occasionally legal systems provide specific code provisions excluding the denial of a licence from the exemption regime.111
(p. 661) 45.51 While the above examples have addressed particular types of events, in a sale of goods contract in particular, it is also necessary to have regard to the actual goods required under the contract. This is of specific importance when the goods contracted for are generic goods. As a general proposition the seller will bear the ‘procurement risk’.112 Again as a general proposition a seller will not be exempted for non-performance, if non-performance is simply due to the failure of a supplier, an increase in the procurement price, or even the circumstance where the goods originally chosen to fulfil the buyer’s order are accidentally destroyed.113 Where substitute goods can be obtained albeit at a higher cost to the seller, then the seller will not receive an exemption for its failure to perform. Naturally there are limits on the lengths a seller can be expected to go to—sometimes called the ‘limits of sacrifice’.114 The crude oil case referred to above is such an example.115 A seller is also likely to be able to obtain an exemption where the parties have agreed on a specific source of supply.116 Where that source is destroyed and thus the goods cannot be supplied, exemption could be expected assuming neither party is responsible for the destruction of the goods.117
45.52 A very similar situation to the one just described can be demonstrated by reference to two Singaporean decisions.118 In both cases the same concrete manufacturer was to sell concrete to different buyers. Sand, a necessary ingredient in ready-mix concrete, was in very limited supply. Indonesia had placed a ban on the export of sand to Singapore, and the Singaporean authorities then sought to regulate the distribution of what sand there was within Singapore. Although the exact facts of each case were far more complex than implied here, in essence the seller was able to rely on a force majeure clause in one instance,119 but was not exempted under an identical force majeure clause in the second case.120 The difference was the seller’s conduct in each case. In the case where the seller did not obtain the exemption, the buyer had offered to assist the seller to obtain the necessary sand from the government stockpile, but the seller decided not to take that assistance. As a consequence it was the seller’s conduct rather than the restrictions on sand which caused the breach.
45.53 As can be seen from these examples, obligors will very rarely be able to rely on an exemption due to an impediment which is within its control.121 In particular an obligor is responsible for the organization of its own operational sequences taken to perform the contract. Only where disturbances in these sequences themselves are caused by an impediment will the obligor be excused. For example, illness, imprisonment, or death of the obligor122or its employees, all lie within the sphere of the obligor. Acts of sabotage or other acts contrary to the instructions of the obligor by its employees also fall within its sphere of risk.123 Where the alleged impediment is an industrial strike the matter may turn on whether the strike is limited to the obligor (that is, an internal dispute and thus within its sphere of risk), or a general, national, or political strike affecting commerce more generally. If it is the latter, exemption may be available.
(p. 662) 45.54 Closely related to these scenarios is the circumstance where a third party engaged by the obligor to perform part of the contract has failed to do so. This is distinct from the simple failure of a supplier who would not typically be actually performing the contract on the obligor’s behalf.124 Nor would it include the obligor’s employees.125 This scenario has been specifically addressed at the international level by Article 79(2) CISG. The solution adopted there is to provide the obligor with an exemption, where both the obligor and the third person satisfy the exemption test laid out in Article 79(1) CISG.