Can we keep the lights on?

With yesterday's news concerning the potential of rolling black outs over the winter months and potential plans afoot to incentive households and businesses to conserve energy, no doubt first thoughts for many will relate to candle and torch buying. 

For many businesses however the concern will be whether the blackouts will impede their ability to deliver contracts, some of which may have already been impacted and continue to be impacted by COVID, the war in Ukraine and the global economic crisis we find ourselves in.

We may therefore find ourselves turning, once again, to our old friend Force Majeure; a contractual provision which has never had so much attention as it has done over the last few years.

Would a rolling blackout trigger a Force Majeure provision? Unfortunately, there is not a clear-cut answer in relation to this as it will depend on what the contract says. If the contract covers events outside of a business' control however then, on the face of it, a black out which delays production could well be a Force Majeure event. But where it excludes events which are 'reasonably foreseeable' then what then? If it is an agreement entered into before yesterday, then it is fair to say that rolling black outs would not have been in either party's reasonably contemplation at the time. But what about an agreement signed today, tomorrow or next week? It then becomes far more difficult.

Should businesses be mitigating the potential risk? We already know, as the Government has told us, that any blackouts would be between 4-9pm, so should businesses change working hours? Should they source alternative solutions such as back-up generators?

These questions and many more will be covered in our forthcoming podcast looking at Force Majeure, its impact and practical applications. If you have any queries that you would like us to consider in that podcast then please do let me know.