How Does the “Force Majeure” Clause Relate to Delivery Default?
A Force Majeure clause is a contractual provision that excuses a party from fulfilling their obligations if an extraordinary event beyond their control (e.g. natural disaster, war, government action) makes performance impossible or commercially impracticable. If a delivery default is caused by a valid Force Majeure event, the penalties may be waived or mitigated, but the contract is typically terminated.
Glossar
Force Majeure Event
Trigger ⎊ Force Majeure events within cryptocurrency derivatives markets represent unforeseen contingencies that disrupt contractual obligations, differing from standard market risk factors.
Force Majeure Clause
Disruption ⎊ Force Majeure clauses within cryptocurrency, options trading, and financial derivatives address unforeseen events preventing contractual fulfillment, extending beyond typical market volatility.
Delivery Default
Default ⎊ In the context of cryptocurrency derivatives and financial options, a delivery default signifies the failure of a party obligated to transfer an underlying asset ⎊ whether a cryptocurrency, token, or fiat currency ⎊ upon exercise of an option or settlement of a futures contract.
Force Majeure
Contract ⎊ This clause within derivative agreements and power purchase contracts excuses performance when an extraordinary event, beyond the control of either party, prevents fulfillment of obligations.