Vessel owners, charterers, buyers and sellers will be anticipating significant delays at Newcastle and other Australian bulk export ports on account of the flooding affecting much of Australia, particularly railways linking producers with the ports. Questions inevitably will arise as to how contracts allocate risk for delay.  Parties should consider whether: 

1. the contract contains a Force Majeure (FM) clause; 
2. it operates in the event of delay in performance; 
3. the relationship with any laytime & demurrage clause; 
4. the FM event falls within the scope of the FM clause; 
5. the invoking party could have performed but for the event; and 
6. whether any failure to perform could not be overcome through alternative means. 

To the extent the FM clause applies the invoking party must comply precisely with the notice requirements laid out in the clause.

You can read more about the application of FM in our blog.