What is a "force majeure" clause in real estate contracts?

A "force majeure" clause in real estate contracts is specifically designed to address situations where certain unforeseen events prevent one or both parties from fulfilling their contractual obligations. This can include natural disasters such as floods, earthquakes, or other extraordinary events like wars or pandemics. When such events occur, the force majeure clause provides a legal framework that relieves the affected parties from liability or obligations, acknowledging that they are not at fault for the inability to perform under the contract.

This type of clause is essential for risk management in real estate transactions, as it protects the parties involved from penalties or damages that could arise from non-performance due to circumstances beyond their control. It highlights the understanding that certain situations are unpredictable and that flexibility is necessary in addressing these challenges within the contractual relationship.