Force Majeure in California Contracts
In California, the short answer is “usually no.” A force-majeure clause—or the related doctrine of commercial impracticability—only excuses performance when the contract expressly lists the triggering event or when the event was truly unforeseeable. Recent California decisions hold that even COVID-19, let alone a cost-raising tariff (a tax on imported goods), won’t excuse performance merely because it makes the deal more expensive.
Example Scenario
For example, let’s say a Huntington Beach surf-gear company agreed to buy wetsuits from Taiwan at $80 each. Six months later, Washington imposes a 25% tariff, raising landed costs to $100. The buyer emails, “Tariffs make this impossible—we’re cancelling under force majeure.” Because the clause listed only “acts of God, war, or pandemic,” the supplier sues in Orange County Superior Court. The judge rules the buyer assumed normal market-risk; the contract stands, and the buyer owes damages for cover plus the supplier’s attorneys’ fees.
Legal Assistance
If new tariffs, embargoes, or other government actions are squeezing your margins, contact AEI Law, P.C. in Huntington Beach before you declare a contract dead. We can audit your force-majeure language, negotiate tariff pass-through amendments, or craft notice and mitigation steps that protect your leverage without triggering a costly breach-of-contract suit.
