This article was originally published in Trade Treasury Payments
As disruption across commodity markets intensifies, force majeure is increasingly being relied on as a default response. But in complex trading structures, that reliance is often misplaced. This article examines how force majeure operates in practice — and where traders and financiers are most exposed.
Force Majeure in Trading Chains
“In commodity trading chains, this causation requirement becomes treacherous. A single cargo may involve a charter party between the shipowner and charterer, a sale contract between traders, and downstream supply contracts with refineries or petrochemical plants. What is often misunderstood is that an event that excuses performance under one contract does not automatically excuse performance under another.”
Key Insights
• Force majeure is a high threshold test of prevention, not commercial difficulty • Upstream disruption does not automatically excuse downstream obligations • Mitigation and alternative performance will be central to any dispute
Read the full article on Trade Treasury Payments https://tradetreasurypayments.com/articles/the-commodity-traders-force-majeure-survival-guide