Act of God and Force Majeure: Evidence-Based Continuity Controls

Act of God Is a Contractual Question

The SSDER glossary defines ACT OF GOD as a natural disaster. In procurement practice, the more useful question is whether the contract’s force majeure clause covers the event, prevents or impedes performance, and sets a route for notice, relief, mitigation, suspension or termination. National law and the negotiated clause can produce different results.

The ICC model clauses distinguish force majeure from hardship and use a reasonableness-based test. Procurement should use that structure as a drafting and review prompt, not as a universal legal conclusion.

Test Causation, Control and Foreseeability

Ask the supplier to identify the event, affected facility or route, start date, obligation, causal link, expected duration and alternatives. Compare the claim with the supplier’s inventory, capacity, subcontractor, maintenance and business-continuity records. A natural event may coexist with a preventable planning failure.

Document whether the event was outside reasonable control, whether it could have been foreseen or avoided, and what performance remains possible. The contract may require different evidence for a delay, price adjustment, suspension or termination.

Build Notice and Mitigation Mechanics

A notice should include contract, purchase order, affected items, dates, event, impact, requested relief, evidence, mitigation and next update. Set a response owner and cadence. Procurement should not wait for a perfect loss estimate when a protective notice or substitute-source decision is time-sensitive.

Mitigation can include alternate plant, approved substitute, split shipment, inventory reallocation, temporary specification, route change, expedited transport or customer communication. Record the cost, approval and quality or regulatory impact of each option.

Link Force Majeure to Continuity and Recovery

A force majeure notice is a trigger for the continuity playbook, not the end of the conversation. Update demand, inventory, production, customer, cash, insurance and transport assumptions. Decide when to activate a second source, reserve capacity or terminate the affected order.

After the event, review recovery time, avoided loss, supplier evidence, contract performance, price claims and lessons learned. If a supplier repeatedly invokes force majeure for ordinary shortages, the sourcing strategy or clause may be wrong.

Worked Example: Flood Notice Without a Recovery Plan

A supplier sends a one-line force majeure email after a flood and stops confirming ship dates. The buyer accepts the excuse but does not ask which lines are affected, whether another plant can produce, or when the next update is due. Production stops three weeks later.

The corrected workflow acknowledges the notice without conceding entitlement, opens a chronology, requests evidence and mitigation, activates a qualified alternate source, and reserves commercial and legal rights. The supplier receives a clear information clock while the buyer protects continuity.

Metrics and Governance

For act of God force majeure procurement, measure both service and evidence quality. Useful indicators include first-pass acceptance, exception rate, response time, unplanned cost, document completeness, damage or discrepancy rate, and the percentage of shipments that follow the approved process. A dashboard should distinguish a supplier failure from a carrier, terminal, broker or internal master-data failure.

Review the metric trend with procurement, logistics, finance, quality and the responsible specialist. Use a monthly exception sample to test whether the control worked in a real transaction, not just whether a field was filled. Repeated exceptions should change the sourcing strategy, contract, lane design or supplier development plan.

Keep the control proportionate to risk. High-value, regulated, time-critical or safety-sensitive cargo needs stronger evidence and faster escalation than a routine shipment. Record the decision owner, approval date, source documents and follow-up action so the next buyer can understand the operating history.

Supplier and Carrier Questions

• Which ACT OF GOD or related glossary condition is assumed in your quotation, procedure or service description?
• Which party owns each data field, physical handoff, inspection, document and exception?
• What evidence will be available before release, loading, movement, receipt, invoice approval or claim?
• What changes require advance notice, requalification, a revised price or a new risk decision?
• How will the supplier report incidents, delays, mismatches and corrective actions, and within what response time?

Implementation Sequence

Implement the control in a small, representative lane first. Capture the baseline process, test the required data and evidence, run a real transaction, and review every exception with the people who performed the work. Do not declare the control effective only because a supplier signed a procedure.

After the first three shipments or operating cycles, update the purchase-order clause, work instruction, scorecard and training. Scale the control to other suppliers only when the evidence is repeatable and the owner can explain what happens when the normal path fails.

Common Mistakes to Avoid

• Treating “Act of God” as an automatic release from all contractual duties.
• Accepting a notice without causation, duration, evidence or affected purchase orders.
• Confusing a subcontractor, cash-flow or planning problem with an external impediment.
• Ignoring mitigation, alternate capacity and customer communication.
• Failing to record whether the buyer reserved rights or accepted a permanent change.

Procurement Implementation Checklist

• Review governing law, force majeure, hardship, notice and termination clauses.
• Request event, causation, duration, affected obligations and evidence.
• Set response clocks, next-update cadence and a single chronology owner.
• Evaluate alternate source, inventory, route, specification and transport options.
• Record cost, quality, regulatory, customer and rights-reservation decisions.
• Run a post-event review and update continuity and supplier strategy.

Frequently Asked Questions

Related Kurums Guides

• Cargo Insurance and Claims
• Freight Rates and Surcharges
• Freight Contracts and Parties
• Customs Documents for Procurement
• Customs EDI and Entry Data
• Container Cells and Cell Guides

Standards and Authoritative Sources

• ICC — Force Majeure and Hardship Clauses
• ICC — Force Majeure and Hardship Clauses 2020 PDF
• UNCITRAL — CISG, Article 79 text
• UNIDROIT — Principles of International Commercial Contracts

Glossary terms covered: ACT OF GOD, force majeure, hardship, notice, mitigation, business continuity, supplier failure