What does "Force Majeure" refer to?

"Force Majeure" is a legal term used in contracts that refers to unforeseeable circumstances that prevent one or both parties from fulfilling their contractual obligations. This concept is important in international business as it provides a framework for dealing with unexpected events such as natural disasters, war, or other emergencies that could disrupt the usual course of business operations.

When a "Force Majeure" clause is included in a contract, it typically outlines the specific situations that may be considered as force majeure events, and it may provide a party with the right to suspend or terminate the contract without liability under those conditions. In this way, it helps protect businesses from the risks associated with unpredictable disruptions that are beyond their control, enabling them to manage risks effectively.

In contrast, other options refer to different aspects of international trade and business. Negotiated trade terms involve predetermined agreements on conditions of trade, while market risks pertain to economic uncertainty affecting trade activities. Agreements on tariffs and quotas are related to government policies affecting imports and exports, but none of these concepts encapsulates the essence of "Force Majeure" as defined.