Supply Chain Management Professional (SCMP) · Question
When developing a contract, what is the significance of the 'force majeure' clause?
A force majeure clause protects parties from liability when extraordinary events beyond their control prevent them from fulfilling contractual obligations.
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Question: When developing a contract, what is the significance of the 'force majeure' clause?
Answer options: ✅ It outlines conditions under which obligations may be suspended due to unforeseeable events
- It defines the payment terms and schedule for the contract
- It specifies the intellectual property rights of the parties
- It establishes the dispute resolution mechanism
Correct answer: It outlines conditions under which obligations may be suspended due to unforeseeable events
Explanation: A force majeure clause protects parties from liability when extraordinary events beyond their control prevent them from fulfilling contractual obligations.
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