Our thoughts and prayers go out to those impacted by Hurricane Sandy and the Nor’easter. While Mother Nature has been relentless against the east coast of the United States over the past several weeks, us IT attorneys cannot help but think about the significance of those force majeure clauses and disaster recovery plans in agreements that are often glossed over during negotiations.
As we watch more and more data be transitioned from internal dedicated servers to cloud service providers, we encourage both service providers and their customers to take care in selecting a product offering that is appropriate — and take care to consider the impact of the force majeure clauses and disaster recovery plans. Weather can have a significant impact on business operations and often times customers and service providers located in different parts of the country or the world are not attuned to the unique risks of choosing certain locations for data centers. To address these risks, cloud providers often have a myriad of product offerings available to their customers that include protections like servers in separate locations with real-time replication. We encourage customers to consider these product offerings to mitigate the risks of unforeseeable weather.
For those of you wondering, “force majeure” is a French phrase literally meaning a “greater force”. Although the definition of a “force majeure event” in an agreement may vary significantly depending on the context of the arrangement, it is often drafted to excuse parties from performance due to acts that are beyond the reasonable control of a party such as floods, fires, hurricanes, riots or acts of terror. Sometimes the clause will include labor strikes or work stoppages, but there is often a question as to whether these are within the control of the party. The clause may also grant a termination right after a period of time of non-performance and may or may not require a customer to continue to pay regardless of non-performance. Finally, the clause may allow a party to seek an alternative provider during the period of non-performance caused by the force majeure event.