You don’t have to take a position on climate policy to notice that wildfire smoke shut a job site, a flood closed a supplier, or an insurer repriced your coverage. Those are contract events. Here’s where they tend to land, and what to do about them — as a drafting problem, not a debate.
This is the one that surprises people. A force majeure clause excuses performance when something beyond the parties’ reasonable control — and beyond their reasonable contemplation — stops a deal. Canadian courts lean on that second part. And as extreme weather becomes regular and forecastable, it gets harder, not easier, to argue that a flood or a heat event was unforeseeable. The generic “acts of God” catch-all you’ve relied on for years is weakening precisely because these events are no longer a surprise.
The fix is counterintuitive: don’t lean harder on the vague boilerplate — name the specific perils that matter to your business and say expressly how they’re allocated. A clause that spells out wildfire, flood, extreme heat, or a grid failure, and states who bears the delay and cost, is far more reliable than a list ending in “and other events beyond reasonable control.”
Disruption from weather is now a scheduling and cost reality, not a freak event. So decide it in advance: who bears a delay caused by a climate event, how much notice is required, what the disrupted party has to do to mitigate or find an alternative source, and how time and price adjust. That’s far better than leaving it to a force majeure fight after a shipment is already stuck.
If your business runs out of a physical space, the risk is direct. Who repairs flood or smoke damage, who carries business-interruption insurance, whether rent abates while you’re shut, and who bears the cost of climate-driven upgrades — these are all negotiable, and increasingly worth negotiating rather than accepting the landlord’s standard form.
Climate-related disclosure is expanding from a big-company concern to a mid-market one. Federally regulated financial institutions already face disclosure expectations, and larger companies increasingly do too — but the practical pressure reaches private businesses through their lenders, insurers, investors, and buyers. Expect climate and physical-risk questions in your next financing or sale. A company that can answer them cleanly looks lower-risk; one that can’t invites a discount.
Plenty of contracts quietly assume “insurance will cover it.” Coverage for climate perils is tightening and repricing, and exclusions are growing. Before a contract leans on an insurance policy to carry a risk, someone should read the policy — the gap between what you assumed was covered and what actually is can be the whole loss.
None of this requires a grand position on climate. It requires clauses that reflect the weather your business is actually operating in. If your contracts still treat a flood as a once-in-a-lifetime surprise, that’s worth a look.
Twenty minutes, no charge — a straight read on where you stand.
Book a 20-Minute Call