What Is Force Majeure? Why "I Ran Out of Money" Doesn't Count

The story in the video

Our lawyer explains force majeure from a five-star rooftop, in the middle of a thunderstorm. A storm like that might be force majeure if it shuts down a port. But the debtor's excuse at the end — "I ran out of money" — is not. That is the line every creditor needs to understand.

What counts as force majeure?

Force majeure clauses and laws usually cover extraordinary events such as:

• Natural disasters: earthquakes, floods, hurricanes
• War, terrorism, riots or civil unrest
• Epidemics and pandemics
• Government action: embargoes, sanctions, import or export bans, lockdowns
• Major infrastructure failures beyond the party's control

Whether a specific event qualifies depends on the wording of the clause and the law that governs the contract.

The conditions: beyond control, unforeseeable, and truly preventing performance

Labelling something a disaster isn't enough. A party claiming force majeure usually has to show that:

• The event was beyond its control
• It could not reasonably have been foreseen or avoided when the contract was made
• It actually prevents performance — not just makes it harder or more expensive
• The event caused the failure to perform (the link matters)
• It notified the other side promptly, often in writing, as the clause requires

Force majeure often only suspends obligations while the event lasts. Many clauses allow termination only if it continues for a long period.

"I ran out of money" is not force majeure

Cash-flow problems, a lost customer or rising costs are ordinary business risks. Courts in most countries are reluctant to treat a lack of funds as force majeure, and payment obligations are rarely excused this way. Money can usually be paid somehow, even if late, so a payment obligation is rarely made truly impossible.

Even when a real force majeure event occurs — say, a bank closure during a war — it may only delay payment while the event lasts, not cancel the debt.

Common law vs civil law: why the clause matters

In common-law countries such as England and Wales, force majeure only applies if the contract contains a force majeure clause, and the clause's wording decides everything. Without one, a party must rely on the much narrower doctrine of frustration.

In civil-law countries such as France, the law itself provides a force majeure defence: the French Civil Code covers events beyond the debtor's control that could not reasonably have been foreseen and whose effects cannot be avoided. Many civil-law systems also have separate rules for hardship, where performance becomes excessively burdensome rather than impossible.

What to do when a customer invokes force majeure

• Ask for the notice in writing, with the event and the obligations affected.
• Read the clause: is the event covered, and are payment obligations excluded?
• Check the causal link: did the event actually stop them from paying?
• Keep invoicing and reserve your rights in writing.
• Agree a payment plan if the event is real but temporary.

How Collecty can help

When a customer hides behind force majeure to avoid paying, Collecty assesses the claim, negotiates locally and escalates when needed — in 190 countries. No win, no fee.