Force Majeure in Mississippi
What many states call a “force majeure” clause is often called an “Act of God” clause in Mississippi. In contracts for services and contracts for real estate, contractual force majeure/Act of God clauses are enforceable, but there is no Act of God defense absent a contractual clause.
This is not the case for contracts for the sale of goods. Unlike with other states, Mississippi’s version of the Uniform Commercial Code (UCC or the Code) specifically addresses force majeure. Mississippi Code § 75-2-617 provides:
Deliveries may be suspended by either party in case of Act of God, war, riots, fire, explosion, flood, strike, lockout, injunction, inability to obtain fuel, power, raw materials, labor, containers, or transportation facilities, accident, breakage of machinery or apparatus, national defense requirements, or any cause beyond the control of such party, preventing the manufacture, shipment, acceptance, or consumption of a shipment of the goods or of a material upon which the manufacture of the goods is dependent. If, because of any such circumstance, seller is unable to supply the total demand for the goods, seller may allocate its available supply among itself and all of its customers, including those not under contract, in an equitable manner. Such deliveries so suspended shall be cancelled without liability, but the contract shall otherwise remain unaffected.
Importantly, this provision applies only to the seller — not the buyer — of goods. So even if a contract for the sale of goods does not contain a force majeure clause, Mississippi law reads one into the contract for the seller.
There are no Mississippi cases interpreting whether a pandemic is an Act of God or a “cause beyond the control” of the seller. In fact, there are only three cases addressing this Code section at all. Two applied the statute, one to drought and another to machinery breakage. Sellers may have a good argument that this pandemic was at least as beyond their control as a machine breaking. But in the third case, the court refused to apply Mississippi’s force majeure statute to a take-or-pay contract, holding that parties contracted to allocate the risk by making the contract take-or-pay. This case may give a party looking to avoid the effects of Mississippi Code § 75-2-617 an argument that the parties’ contractual risk allocation should control over the statute.
Mississippi, like other states, has enacted UCC § 2-615 and § 2-616 on impracticability of performance, a concept similar to force majeure. There is no case law in Mississippi on either: given Mississippi’s direct force majeure statute, Mississippi businesses have relied on it rather than impracticability.
Unprecedented times are why force majeure clauses exist. For sellers of goods in Mississippi, the UCC may protect sellers even if the contracting parties did not include a force majeure clause in their contract.