Exceptional Events (Clause 18): FIDIC’s new force majeure

Wars, natural disasters, epidemics, strikes — events no party controls, yet which derail projects. FIDIC regulates them in Clause 18. In the 2017 editions the former Force Majeure was renamed Exceptional Events — and this is more than a change of name.

What an exceptional event is

It is an event or circumstance that:

• is beyond a party’s control;
• which the party could not reasonably have foreseen before entering the contract;
• which could not reasonably have been avoided or overcome;
• and which is not substantially attributable to the other party.

Typical examples in the list: war and hostilities, rebellion and terrorism, riots and disorder, strikes beyond the Contractor’s control, certain natural catastrophes.

Consequences

If an exceptional event prevents performance:

• the affected party is released from the affected obligations while the event lasts;
• the Contractor may obtain an extension of time (EOT);
• in limited cases (e.g. certain listed events) — also cost;
• on prolonged impossibility (beyond a set period) termination is possible, with a special settlement.

An “exceptional event” does not terminate the contract automatically — it triggers a procedure of notices and consequences. Without notice, the right can be lost.

The notice procedure

The party affected by the event must give notice to the other party within the set time and take reasonable steps to mitigate the consequences. As with claims, discipline and records decide here: record the start, development and end of the event, the steps taken and their impact.

How it differs from an ordinary claim

An exceptional event is a special ground with its own regime (Clause 18), but procedurally it overlaps with claims (Clause 20) for the notices about time/cost. In practice, don’t get confused: use the Clause 18 mechanism as the ground and observe the Clause 20 notice deadlines for the consequences.

Practical tips

• Check which events are listed and which are excluded in your edition and Particular Conditions.
• Give notice in good time — not “when the full scale is clear”.
• Document mitigation measures — without them, cost may be refused.
• For prolonged events, plan the termination and settlement scenario in advance.

Related topics: “The 28-day rule” and EOT and delay analysis. Need help with a notice or assessing the consequences of an event? Contact our experts.