What does the term "force majeure" refer to in real estate contracts?

The term "force majeure" in real estate contracts refers to a clause that addresses unforeseen circumstances that can prevent one or both parties from fulfilling their contractual obligations. This might include events such as natural disasters (hurricanes, floods, earthquakes), acts of war, strikes, or other extraordinary events that are beyond the control of the parties involved. When such an event occurs, the force majeure clause typically allows for the temporary suspension of the contract’s obligations or potentially its cancellation, without penalty for the affected party. This provision is crucial as it provides a framework for handling situations that could not have been anticipated at the time of contracting, thereby offering a level of protection and flexibility for the parties involved.