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The events of Sept. 11 have caused many business parties to focus on the consequences of unanticipated and uncontrollable business interruptions, and potential liability for failure to perform a contract. Set forth below is a force majeure clause that might be included in a service agreement. SAMPLE CLAUSE: Neither Party shall be deemed in default of this Agreement to the extent that performance of its obligations or attempts to cure any breach are delayed, restricted or prevented by reason of any act of God, fire, natural disaster, act of government, strikes or labor disputes, any actual [or threatened] act of terrorism, inability to provide raw materials, power or supplies, or any other [similar] act or condition beyond the reasonable control of the Parties; provided that the Party so affected provides prompt notice and uses [continuous] [its best] [all reasonable commercial] efforts to avoid or remove the causes of nonperformance and continues performance hereunder immediately after those causes are removed. Upon such circumstances arising, the Parties shall meet forthwith to discuss what, if any, modification may be required to the terms of this Agreement, in order to reach a resolution. In the event that any act of Force Majeure prevents either Party from carrying out its obligations under this Agreement for a period of more than __________ (__) days, the other Party may terminate [the affected services under] this Agreement upon__________ (__) days written notice. [Notwithstanding the above, service provider shall be obligated to perform all disaster recovery services set forth herein.] For the recipient of the services, a broad definition is best. The parties will negotiate issues of termination. The reciprocal nature of the last sentence of this clause highlights a risk to the recipient, who would rather be the sole party with an option to cancel.

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