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Summary
G-Cloud contracts include force majeure terms, but these differ between versions of the framework and are vague in parts. If you think that COVID-19 has or might have a force majeure impact on your services / contract, you should check the specific terms of your G-Cloud Call Off.
If it seems there is a case of force majeure then buyers/suppliers should notify the other party as soon as possible and negotiate a reasonable position.
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.Background
G-Cloud is a Framework contract set with Call Off contracts established between individual buyers and sellers. The relevant conditions when it comes to force majeure are the order from and Call Off terms.
A G-Cloud contract is quite complex as it includes the Supplier’s terms and conditions as well as the Call Off terms. However, some parts of the contract trump other parts. This is known as the Order of precedence and in the case of G-Cloud the order is as follows:
- the completed Order Form
- the Framework Agreement
- the clauses of a Call-Off Contract (excluding Supplier Terms)
- the Supplier’s Terms
- any other document referred to in the Call-Off Contract clauses
This is made slightly more complex as this information cannot be found in the Call Off, it is written in Framework and included in the Call Off by reference only.
Lastly, things are made more complex as each version of G-Cloud treats force majeure slightly differently.
G-Cloud 11
G-Cloud 11’s force majeure terms include both rights of termination and relief from liability. However, the definition of force majeure is vague.
Definition
The G-Cloud 11 Call Off defines Force Majeure Event twice:
Part B Terms and Conditions 11.1.11
For the purposes of this Agreement, the expression “Force Majeure Event” will mean any cause affecting the performance by a party of its obligations under this Agreement arising from acts, events, omissions, happenings or non-happenings beyond its reasonable control, including acts of God, riots, war or armed conflict, acts of terrorism, acts of government, local government or Regulatory Bodies, fire, flood, storm or earthquake, or disaster but excluding any industrial dispute relating to any party, the party’s personnel or any other failure of a Subcontractor.
Schedule 6 – Glossary and interpretations
A Force Majeure event means anything affecting either Party’s performance of their obligations arising from any: acts, events or omissions beyond the reasonable control of the affected Partyriots, war or armed conflict, acts of terrorism, nuclear, biological or chemical warfare acts of government, local government or Regulatory Bodiesfire, flood or disaster and any failure or shortage of power or fuel industrial dispute affecting a third party for which a substitute third party isn’t reasonably available
The following do not constitute a Force Majeure event: any industrial dispute about the Supplier, its staff, or failure in the Supplier’s (or a Subcontractor’s) supply chain any event which is attributable to the wilful act, neglect or failure to take reasonable precautions by the Party seeking to rely on Force Majeurethe event was foreseeable by the Party seeking to rely on Force Majeure at the time this Call-Off Contract was entered into any event which is attributable to the Party seeking to rely on Force Majeure and its failure to comply with its own business continuity and disaster recovery plans
While neither definition includes ‘pandemic’ it is up for debate between Buyer and Supplier whether COVID is sufficiently similar to the list given and the degree to which the exclusion of pandemic is intentional. It is highly like that in some cases ‘acts of government’ as a result of COVID-19 would fall under this definition.
Order form
A correctly completed G-Cloud 11 Order Form should include a statement of the following form:
A Party may End this Call-Off Contract if the Other Party is affected by a Force Majeure Event that lasts for more than [NUMBER] consecutive days.
Termination
The number of days in the order form is referenced in Para 23.1 (and also indirectly by Para 18.7) where the right to terminate the contract is stated.
Non-performance and relief from liability
Para 11.1 of the terms sets out the rights that both parties have if there is a force majeure event. In short, if the buyer and/or supplier cannot hold up their end of the deal, they are still liable, but they can claim relief from the liability from the other party. However, they must notify the other party as soon as reasonable.
What next
Each G-Cloud Call Off will be different. So, apply the rationale set out in Force Majeure and COVID-19 and see if COVID-19 is the sole reason for the impossibility to provide the services and contact the other party.
G-Cloud 10
From a force majeure point of view G-Cloud 10 practically the same as G-Cloud 11; but there are differences between the two frameworks. In summary, these are:
- The number of days before the contract is terminated is stated rather than being agreed in the Order Form
- Liabilities are removed (to some extent) as a result of force majeure rather than relieve being claimed
- There are the structural differences between the contracts making the key clauses harder to find
Termination
G-Cloud 10 states in paragraph 5.4 of the Framework that the agreement can be terminated if the services under the contract cannot be provided for 60 consecutive Working Days. While this statement is in the Framework it is referred to by the Call Off so applies equally to any G-Cloud 10 Call Off Agreements you may have.
Note in G-Cloud 11 the number of days must be stated in the Order Form.
Liability
In paragraph 5.2 of the G-Cloud 10 Framework it states that if there is a force majeure event then neither buyer or supplier is liable in any ‘delay in performing, or failure to perform, it’s obligations’ as long as they are as a result of the force majeure.
This is essentially the same as G-Cloud 11 but there may be circumstances where G-Cloud 10’s no liability does differ from G-Cloud 11’s relief from liability – if this does seem a meaningful difference you should seek legal advice.
Structure
Both G-Cloud 10 and 11 include elements of the Framework into the Call Off agreement. This is done through a clause in the Call Off that lists a set of paragraphs in the Framework that are considered to be included in the Call Off and should be read replacing the word ‘Framework’ with ‘Call Off’ and ‘Authority’ with ‘Buyer’. Legally none of this makes any difference to the clauses it is just rather confusing the find some important