In August 2014, steel and mining company ArcelorMittal announced that it was suspending an expansion project to triple its iron ore production in Liberia due to the Ebola epidemic in West Africa. A few days earlier, Brazilian sugar exporter Cosan SA declared that it would be unable to deliver sugar to some of its clients after a fire destroyed its warehouse at the Port of Santos in Brazil. And in July 2014, oil and gas company Royal Dutch Shell announced the suspension of a shale gas exploration project in Ukraine due to its proximity to the crash site of Malaysian Airlines Flight 17.

What does a deadly virus in West Africa, a fire in Brazil, and a plane crash in Ukraine have in common? Each resulted in the invocation of force majeure (“superior force”), a common clause in long-term international contracts that frees both parties from liability or obligation when an event beyond the control of the parties prevents one or both parties from fulfilling their obligations under the contract. Force majeure clauses thus serve as a precaution against the risks posed by certain economic, political, and natural disaster events.

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