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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.Continue Reading FORCE MAJEURE IN MISSISSIPPI

Suppliers and purchasers of any kind of movable, tangible property may be unaware that they have a powerful tool under the Uniform Commercial Code (UCC) for protecting themselves in this national time of uncertainty: a demand for adequate assurance.

Every state has adopted at least some portion of the UCC, though there are state-to-state variations. Article 2 of the UCC generally applies to any contract for the sale or purchase of goods (but not service or real estate contracts). When contracts cover both goods and services, some states look to whether the dispute centers on the goods, while others examine the predominant purpose of the contract.

If the UCC governs the parties’ contract, then under UCC Section 2-609, when one party to a contract is reasonably insecure that the other party won’t perform, it can send a written demand for adequate assurance. If assurance isn’t received in a reasonable time, not to exceed 30 days, the requesting party can treat the contract as terminated and seek damages.

A demand for adequate assurance is nothing more complicated than a writing asking for some form of assurance that the other party will perform. Types of assurance that courts have found reasonable include letters of credit, heightened warranties, and access to the other party’s books and records. Some courts have allowed verbal demands, but since the model statute requires that the demand be in writing, the safer course of action is to send a demand in writing.Continue Reading COVID-19 Insecurity: Using a Demand for Adequate Assurance Under the UCC