A cyberattack shuts down your Dallas shipping company’s systems, causing delays. Can you use force majeure to avoid being held responsible? What if a vendor you rely on gets hacked and fails to deliver?
Under Texas law, the answer depends largely on your contract’s terms and the circumstances of the disruption.
When does a cyberattack qualify as force majeure?
A force majeure clause is a contract term that may excuse missed deadlines or duties when events beyond a party’s control prevent it from doing what it promised.
Texas courts look at the exact wording of these clauses. If your contract does not list cyberattacks, the vendor may rely on a broader clause covering events beyond its control. In such cases, the vendor generally must show that it could not have predicted the event when signing the contract.
However, a cyberattack does not always excuse missed duties. The vendor must show that the clause covers the attack and that the attack caused the service failure, as required by the contract. The agreement may also require prompt notice and efforts to restore services.
When does a cyberattack become a breach of contract?
If force majeure does not apply, failing to deliver promised services may constitute a breach.
To prove a breach of contract in Texas, you generally must show that a valid contract existed, you met your duties or had a legal excuse, the other party failed to meet its duties and you suffered losses as a result.
Your contract may also include terms that affect the vendor’s duties, liability and your options:
- Service-level agreements: Set service standards, deadlines and ways to address missed targets.
- Limits on liability: Set caps on how much money you can recover.
- Notice rules: State when and how vendors must report service failures.
These terms help determine whether the vendor is responsible and what options you have if services fail.
Understanding your options after a vendor dispute
Whether you provide services or rely on outside vendors, maintaining records of service interruptions, communications and financial losses can help you assess potential contractual claims.
A Texas business litigation attorney can review your agreement, determine whether force majeure applies and evaluate potential claims, defenses or remedies. Legal guidance can also help you address unclear contract terms and reduce the risk of similar disputes in the future.
