Which clause can be added to a contract to avoid issues arising from unforeseen incidents?

A force majeure clause is essential in a contract as it addresses unforeseen incidents that may prevent parties from fulfilling their contractual obligations. This type of clause typically outlines specific events, such as natural disasters, war, or other extraordinary circumstances, that could hinder performance. When a force majeure clause is invoked, it usually allows for either the suspension or termination of the contract without penalty, protecting the parties from legal consequences arising from situations outside their control.

Incorporating this clause is crucial for managing risk and ensuring that both parties understand their obligations and liabilities in the face of unpredictable events. This foresight can lead to better relationship management and continuity in supplier relationships, as it establishes a clear framework for dealing with disruptions.