The force majeure challenge
How Shawn Curran has automated the removal of force majeure language from contracts
In this environment, technology has an important role to play. Overnight, technologies like DocuSign have become mission-critical across the city and our firm has had to quickly scale up to support this. To retain some level of information governance, we have taken the approach of applying matter-centricity to the DocuSign platform by creating a clear relationship between a DocuSign matter and a matter within our document management system.
There are challenges in this approach, specifically in the effort required to set up an email account for each individual matter. The question also remains: if economic activity returns to normal, while the world remains in some form of lockdown or social distancing, will usage of electronic signing platforms increase further than the current spike? We have already started preparing for this eventuality by investing in process automation.
Skype has also been critical in allowing business to collaborate while staff work remotely, and contract review technologies have been important as many businesses need to quickly assess their contractual rights and obligations across their entire operation.
Our top priority is to provide clients with the support they need in a cost effective and efficient manner. In light of the increased attention given to the force majeure clause over recent weeks, we quickly responded to client need by developing an app which can extract force majeure language from contracts.
The Force Majeure App, which we provide free to our clients, is designed to help our clients prioritise their time more effectively. The tool was developed internally drawing on expertise from our lawyers, legal engineers and software engineers.
Although we brought the tool to market within two weeks of the official lockdown, we had been investing in our technology platform for the year leading up to covid-19, allowing us to quickly turnaround our app.
The app can quickly analyse large numbers of contracts by using our proprietary technology to search, analyse and produce a summary report through email, which will indicate:
- If there is force majeure-type wording.
- If there is wording relating to pandemics, epidemics or illness.
- If there is wording relating to government action. If there is generic force majeure-type wording relating to events beyond the parties’ reasonable control.
- If there is wording which indicates the presence of a termination right linked to force majeure.
We envision the app will add value for clients with either supplier contracts or customer contracts. In both cases, businesses may wish to identify which contracts contain a right to terminate if a force majeure event persists for more than a specified period of time.
The tool can be accessed on a flexible basis, by sending an email to a pre-defined mailbox and attaching the documents that need reviewing.
Once the contract has been processed, the tool generates a report, including excel where multiple contracts are sent, and responds to the sender – attaching the report which specifies for each contract where we detected force majeure-related language.
Although the app does a great job, we’re clear with clients that the software is not perfect. The tool was based on pre-pandemic force majeure language and the app will need to constantly evolve in step with newly worded force majeure provisions that include covid-19 wording.
Even with the best technology, there’s no substitute for human review by an experienced lawyer who can judge how a force majeure provision interacts with the rest of the agreement, or factor in the specific circumstances of the company. However, it can provide substantial value to clients, especially where a large number of contracts need reviewing.
Force majeure was the clause of the moment at the beginning of the covid-19 crisis, however we expect a growing demand for technology assisted extraction of contractual obligations across many different agreement types.
The pandemic has had a unique impact on the legal tech market. Will the post-pandemic market favour digital experiences over face-to-face business?
Many unanswered questions remain, though it’s clear behaviour towards technology has materially shifted and it’s likely to remain.
Shawn Curran is head of technology at Travers Smith traverssmith.co.uk