Background
As part of the radio program "Closing the Loop" on Radio North, hosted by Adv. Tal Kaufman, this episode focused on one of the most widely used yet often misunderstood legal concepts: force majeure. In this episode, Tal hosted her partner and colleague, Adv. Asaf Shavit Shtriks, for a practical and thought-provoking discussion on how force majeure operates in real life, especially in an era defined by uncertainty, from global pandemics to geopolitical instability.
About the Program: "Closing the Loop"
"Closing the Loop" is a weekly platform connecting law, business, and society. In each episode, Adv. Tal Kaufman hosts professionals and industry leaders for open, accessible conversations about everyday legal issues and their broader implications, offering listeners both clarity and practical insight.
Understanding Force Majeure in a Changing Reality
During the program, Tal and Adv. Asaf Shavit Shtriks explored how the concept of force majeure has evolved in recent years. What was once considered a narrow and rarely successful legal argument has become increasingly relevant in light of recent global events.
Traditionally, Israeli courts interpreted the requirement of unforeseeability very strictly, to the point that Section 18 of the Contracts Law was often considered almost a "dead letter." The prevailing approach assumed that, in Israel's reality, almost any event - from wars to economic fluctuations - could be anticipated.
However, a noticeable shift has taken place. Courts are now more willing to examine not only whether an event was foreseeable, but also its actual impact on the contractual relationship. In this context, even events such as war, which were once considered foreseeable in the region, have been recognized in certain circumstances as force majeure.
Legal Framework and Practical Use
One of the key takeaways from the discussion is that Israeli law does not provide a single, unified definition of force majeure. Instead, the concept is defined differently across various laws and sectors.
For example, specific legislation and regulations may list events such as war, natural disasters, strikes, or fires, while other frameworks require cumulative conditions such as lack of control, absence of fault, and the inability to prevent or foresee the event.
In practice, force majeure clauses are essential in contracts, particularly in long term agreements. They serve as a critical risk management tool, helping businesses navigate disruptions that ripple across supply chains and operations.
Real World Impact: From Theory to Practice
To bring the discussion closer to real life business challenges, the program also featured Ze’ev Barzilai, a senior executive in the automotive industry with over 20 years of experience.
From his perspective, the application of force majeure differs significantly between new and used vehicles.
In the case of new cars, delays in delivery due to external factors beyond the importer’s control are generally well understood and rarely lead to successful claims.
In contrast, the used car market presents greater complexity. Issues relating to disclosure and transparency often become the weak point for companies, with courts tending to side with consumers when proper disclosure is lacking.
These examples highlight how the same legal concept can play out quite differently depending on the context.
Conclusion: A Practical Takeaway
As the discussion concluded, the key message was clear: Force Majeure is no longer a theoretical clause buried in contracts; it is a living, evolving concept that requires careful consideration.
For businesses, the takeaway is to draft precise and tailored clauses, taking into account real world risks.
For consumers, it is essential to understand that not every disruption automatically qualifies as force majeure, each case depends on its specific circumstances.
In a world where uncertainty has become the norm, understanding how to anticipate, allocate, and manage risk is no longer optional; it is essential.
