Does economic downturn allow use of force majeur clause?
As affirmed in a case earlier this year the force majeure clause wording "any other cause beyond the Seller's reasonable control" has to be read in the context of the entire clause. The court remarked that it was telling that there was nothing in any of the specific force majeure examples in the clause even remotely connected with economic downturn, market circumstances or the financing of the deal.?
The natural and ordinary meaning of this wording was that it was addressing the position of the seller rather than the purchaser and was a force majeure circumstance that only the seller could rely on. The burden of proof was on the party relying on the clause to show that it could be construed to include any funding difficulties it was encountering (which it could not). And nothing in the doctrine of frustration helped that party as an increase in the mere expense or onerousness of a contract cannot constitute frustration.
Case: Tandrin Aviation Holdings Ltd v Aero Toy Store