The delay was caused by a typhoon
Force majeure clauses in China factory contracts - what qualifies and what does not, CCPIT certificates, notice deadlines, loss allocation, and when you can terminate

Hello, this is GreenFrog Seoul.

Ten days before shipment, a WeChat message arrives from the factory. "The typhoon shut us down for two days. This is force majeure, so we need to push delivery back three weeks."

That one line bundles several things together. The typhoon happened, that much is true. The factory probably did lose two days. But why two lost days turn into a three-week delay, and who absorbs the losses those three weeks create, are entirely separate questions. If you have no answer to them, you end up accepting whatever number the factory named.

That is what today is about. A force majeure clause is not there to settle whether something went wrong. It is there to decide in advance who carries how much of the loss when it does. It sits as a paragraph in the contract that nobody reads for years, until the one moment when everything is urgent and you suddenly need it.

The overall skeleton of a contract was covered in Episode 12, and purchase orders and production tracking in Episode 102. Today we look at the machinery that engages when that contract stops running to plan.

Importers usually lose force majeure disputes not because they argued "that was not force majeure" and lost. They lose because the moment they accept that it was force majeure, the contract has no sentence saying what is excused next and what is not. The typhoon is not the factory's fault, but who pays the air freight the typhoon created is still entirely up for negotiation.

1. What force majeure really decides is the scope of the excuse

When someone says "this is force majeure," most people hear it as: something unavoidable happened, so the factory is off the hook. That is only half right.

Where force majeure applies, the factory is released from liability for performing late. It is no longer in breach, and it owes no liquidated damages. All of that is correct. But in practice the money almost always sits outside that boundary.

A three-week slip kills the selling window on a seasonal product. If a TV shopping slot was booked, there is a penalty. If you took online pre-orders, refunds go out. Switch to air freight to catch up and you pay five times the ocean rate. These costs land whether or not force majeure is established. What the clause decides is who ends up holding them.

So move the focus of the negotiation. Arguing about whether the typhoon really happened is usually pointless. It happened. The questions worth asking are different ones.

• Why does a two-day typhoon produce a three-week delay? Ask them to separate the period directly blocked from the time spent on recovery and rescheduling.
• What did the factory do in the meantime? Whether they tried to shift the work to another line or split it across partner factories is the heart of the duty to mitigate.
• How do we split the cost if we take alternative measures? Some factories will cover half the air freight differential; others will not pay a cent.
• How long do we wait before we can walk away? With no duration cap, the side waiting indefinitely is you.

If those four points are already written into the contract, the day the incident hits you are confirming, not negotiating. If they are not, you start negotiating from zero at the most chaotic possible moment, with the goods sitting in their factory and the urgency on your side. That is a bad seat.

2. What counts as force majeure and what does not

A factory saying the words "force majeure" does not make it so. Sort the reasons you actually run into by character and the line is fairly clear.

The rows in bold are where most real disputes live. The sixth one in particular, a factory claiming force majeure because raw material prices jumped, comes up constantly.

The test here is simple. Copper is up 40% and the factory loses money at this unit price: that is the factory's problem, not an inability to build. Performance is still possible. If instead the government bans distribution of a material and there is genuinely none on the market, that is a different story. The line runs between more expensive and unobtainable.

3. The three-part test under Chinese law versus an Anglo-American clause

This is where a lot of people get tangled up. Contracts with Chinese factories are usually in English with clauses drafted in the Anglo-American style, but when a dispute breaks out the governing law is often Chinese law. The two systems work differently.

Chinese law: it applies even with no clause

The Chinese Civil Code defines force majeure as an objective circumstance that is unforeseeable, unavoidable and insurmountable. All three have to be satisfied. And there is one more thing that matters: because this is a statutory definition, it applies even if your contract contains no force majeure clause at all.

If you have been thinking "we left force majeure out of our contract, so the factory is liable no matter what," look again. Where Chinese law governs, statutory force majeure comes in on its own. Omitting the clause does not remove the excuse; it leaves you with the bare statute and no notice deadline, no evidence requirement and no duration cap. None of that helps you.

The useful conclusion is this. Treat the contract clause not as a way to switch off statutory force majeure, but as a way to shape how it applies in your favor. Narrow what counts as a cause, force notice within a set number of days, specify the evidence required, and give yourself a termination right once it runs past a certain point. None of those four exist in the statute, so they exist only if you put them in the contract.

Applying the three-part test to real situations

Unforeseeable, unavoidable and insurmountable sound abstract, but held up against a concrete case they separate more cleanly than you would expect.

• Unforeseeable — it has to have been unknowable when the contract was signed. If the typhoon warning was already out when you agreed the delivery date, it was foreseeable. How far a recurring event like the Guangdong summer typhoon season counts as foreseeable is arguable, but writing a rainy-season or typhoon-season buffer into the contract removes most of that argument up front.
• Unavoidable — reasonable effort could not have prevented it. A warehouse sitting in a flood zone that takes the same damage every year starts to look avoidable.
• Insurmountable — nothing could be done after it happened. This is the element that fails most often in practice. If another line was idle, if a partner factory could have taken part of the run, or if stock fabric could have kept some of the order moving, it was surmountable.

When a factory claims force majeure, the third element is usually where you have room to dig. You cannot undo the typhoon, but you can ask as many questions as you like about what the factory did after it.

4. How to read a CCPIT force majeure certificate

The China Council for the Promotion of International Trade (CCPIT, 中国国际贸易促进委员会) issues a certificate attesting to force majeure facts. It became widely known when they were issued in volume during COVID, and factories still attach one now and then when notifying a delay.

The document arrives with an official seal on it, which carries a certain weight. Once you know precisely what it certifies, the reaction changes.

The right-hand column is the point. The certificate confirms that the event happened in that area. It does not confirm that this factory therefore could not perform this contract. Causation and the reasonableness of the delay period are still things the factory has to establish separately.

Just remember that a certificate landing in your inbox does not end the negotiation. It is a starting point, not a conclusion. And the reverse holds too: no certificate does not mean no force majeure. Local government notices, meteorological records and other objective evidence establish the same thing perfectly well.

5. The notice obligation and its deadline - where the excuse breaks most often

The most powerful part of a force majeure clause in practice is the notice provision. However carefully you draft the list of causes, without a notice clause the factory tells you whenever it suits them; with a tight one, simply failing to notify on time shakes the whole claim.

What changes when notice is late

The pattern we see repeatedly runs like this. Regional power curtailment starts in early August. The factory says nothing, then declares force majeure three days before the delivery date. You had three weeks in which you did nothing, when you could have been pricing air freight, splitting the urgent volume to another factory, or warning your own buyer.

That produces a loss created by the late notice itself. The power cut may not be the factory's fault, but the opportunity you lost because nobody told you in time is. Spell that structure out in the contract and you gain a card to play.

The bottom row is the conclusion of the table. Writing that losses enlarged by late notice are not excused works better in practice than writing that missing the notice deadline voids the force majeure claim outright. Factories push back hard on the latter at the negotiating table, and a tribunal may well find it excessive. The former reads as natural logic, and most factories accept it.

6. What is excused and what is not

Say force majeure is established. What exactly is excused? Leave this boundary blurry and it becomes the biggest fight later.

Look closely at the fourth row. Force majeure excuses the obligation to perform; it does not create a new right to keep money already received. If production ultimately becomes impossible and the contract is terminated, the factory keeps only what corresponds to what it actually performed and returns the rest. In practice, though, factories quite often come back with "we took typhoon damage too, so we will keep the deposit against it." The contract needs a sentence that anticipates this.

The sixth row, the air freight differential, carries real weight too. Divert goods that would have taken 40 days by sea onto a plane and the freight multiplies several times over. Nothing in the statute says who pays that difference under force majeure. It is settled purely by the contract and the negotiation. One line — "any additional cost arising from a change of transport mode to recover a force majeure delay shall be shared equally by the parties" — removes most of the argument when it happens. Losses in transit and insurance claims are a different animal, covered separately in Episode 57.

7. The language to actually put in the contract

By now you have a sense of which elements you need. Time to turn them into sentences. Here is a usable skeleton, item by item.

Definition clause - pair the list with exclusions

Listing causes is not enough on its own. Tack "and other similar causes" onto the end and the factory gains room to slot in anything. Write an inclusion list and an exclusion list together.

"Force majeure means an objective circumstance that the parties could not foresee, avoid or overcome, including natural disasters, war, compulsory government measures (including power restriction measures), import or export prohibitions, port closures and large-scale strikes. However, fluctuations in raw material prices, currency fluctuations, the supplier's financial condition, equipment breakdown, labor supply problems and changes in market demand shall not constitute force majeure."

That one exclusion line does a lot of work later. When you are asked for a price increase or a delivery extension because material costs went up, quoting the sentence back keeps the conversation short.

Notice clause - deadline, method and evidence in one sentence

"The party affected by a force majeure event shall give written notice to the other party's designated email address within 5 business days of the date the event occurs, stating the nature of the event, the time it occurred, the volume affected and the expected number of days of delay. Within 15 days of that notice, it shall submit supporting evidence issued by a government authority or a recognized third party. If notice is not given within the above period, no excuse may be claimed for losses that were enlarged during the period the notice was delayed."

Duty to mitigate - the clause most often missing

An enormous number of contracts simply do not have this one. Which is a shame, because it ties directly to the insurmountability element above and therefore carries real force.

"The party claiming force majeure shall take all commercially reasonable measures to minimize its effects, including consideration of alternative production lines, distributed production through partner factories, alternative raw material sourcing and partial shipment. At the other party's request, that party shall explain in writing the measures taken."

The last sentence is the key. With an explanation duty in place, the factory cannot simply say "there was nothing we could do" and move on. It has to write down what it tried, and if what comes back is thin, that thinness is itself negotiating material.

Duration cap and termination right

"If a force majeure condition continues for more than 30 days, the parties shall confer on alternative means of performance. If it exceeds 60 days, either party may terminate all or part of the relevant order by written notice to the other, in which case the deposit paid by the buyer, less an amount corresponding to the portion already performed, shall be refunded within 15 business days of the date of notice."

Deposit refund and settlement

Without a refund deadline attached to the termination clause, you get a promise to return the money and then months of stalling. Write the deadline and the settlement basis together.

"The deduction under the preceding paragraph shall be limited to the actual cost of work in progress and buyer-specific raw materials verified by the buyer, and the seller shall submit material purchase receipts and a work-in-progress status report evidencing the same. The buyer may demand delivery of that work in progress and those raw materials."

8. When it drags on - where do you cut it off

Here is what happens when you leave the duration cap out of a force majeure clause. The factory keeps saying it is "still recovering," you are bound by the contract so you cannot go to another factory, and you cannot get the deposit back either. The longer it runs, the more the loss piles up on your side. A duration cap builds that exit in advance.

Where you set the cap is determined by the product. For strongly seasonal apparel or holiday goods, even 30 days is long — past that point the goods arrive and you cannot sell them. For everyday items you sell year-round, 60 or 90 days is fine. Work backward from the date your selling window closes.

What to secure when you terminate

Sending the termination notice is not the end of it. With goods and money still sitting in China, several things need cleaning up.

• Inspect the work in progress. The completion percentage the factory claims often differs from reality. Send an inspector to verify quantity and condition, and photograph it. If you cannot send anyone, at minimum walk the floor over a video call.
• Separate the raw materials. Split what was bought exclusively for you from the factory's general stock. Common fabric can be used on another order, so it is not deductible.
• Recover tooling and buyer-supplied materials. Confirm location and condition before the settlement closes. Access gets difficult once the negotiation sours.
• Handle finished goods. If some units are already built, taking shipment of those first is usually to your advantage. Sitting in a factory warehouse, they deteriorate.
• Put the agreement in writing. Get the settlement amount, the refund schedule and the remaining claims and obligations onto one page, signed by both sides.

9. When it is not force majeure but they say it is

This is the situation we run into most often in consultations. Delays caused by something else and dressed up as force majeure outnumber genuine disasters. From the factory's side it is a convenient word that dodges liquidated damages and quiets you down.

The bottom row is the one that splits easily. The government did close the factory, true, but if the cause was exceeding emission limits, the character of it changes. It would not have closed had they followed the rules, so it is an avoidable circumstance. Do not back off at the phrase "government measure" — ask what triggered the measure.

Three questions that do the checking for you

There is a way to verify without giving the impression you are accusing anyone. If it is genuinely force majeure, the factory has no trouble answering.

• "Could you send the official notice or documentation for the measure? We need to explain this to our own buyer." Attaching a reason makes the request natural. If it is real, one photo of the local government notice settles it. If not, the answers get vague right here.
• "Let us know what options you have looked at to reduce the impact and we will help look too." This asks about the duty to mitigate but arrives as an offer of help. If they did nothing, the reply comes back short.
• "Please send the expected recovery date and the line allocation schedule for our volume afterward." Concrete dates mean they have a handle on the situation. If the answer stays "soon," there is probably another reason behind it.

10. Common mistakes

Things that keep coming up in force majeure consultations:

• Leaving force majeure out of the contract entirely while setting Chinese law as the governing law
• Listing causes without an exclusion list (raw material spikes, currency, cash shortages)
• Writing the notice deadline as "without delay" and then arguing over how many days counts
• Having no provision on the effect of late notice, so notifying late costs the factory nothing
• Having no duty-to-mitigate clause, so there is no basis to challenge a factory that tried nothing
• Omitting a duration cap and termination right, so you wait indefinitely
• Omitting a refund deadline on termination, so the deposit comes back months late
• Mistaking a CCPIT certificate for a ruling on liability and accepting it as such
• Never comparing the event period on the certificate with the delay the factory claims
• Having no cost-sharing basis for air freight, so you absorb the whole differential
• Forgetting a clause deferring payments that fall due during a force majeure period
• Accepting the factory's settlement figure without inspecting the work in progress
• Not confirming the location of tooling and buyer-supplied materials before settlement
• Believing the explanation without checking whether other factories in the area are running
• Negotiating only by phone or WeChat and never putting the agreement in writing

11. Force majeure response checklist

When drafting the contract

• Wrote both included and excluded causes into the force majeure definition
• Named raw material spikes, currency moves and cash shortages in the exclusion list
• Wrote the notice deadline as a number of business days
• Designated the notice method and a recipient address rather than a person
• Included an obligation to submit official evidence and a deadline for it
• Stated that losses enlarged by late notice are not excused
• Included the duty to mitigate and a duty to explain measures taken in writing
• Set duration caps such as 30 and 60 days, with a termination right
• Wrote the deposit refund deadline and the deduction basis on termination
• Added a right to demand delivery of work in progress and raw materials
• Added deferral of payments falling due during a force majeure period
• Set the cost-sharing basis for air freight and other alternative transport

Immediately after receiving notice

• Confirmed the notice met the contractual deadline and method
• Distinguished whether the evidence submitted is official or the factory's own document
• Compared the event period in the evidence against the delay being claimed
• Confirmed the area named in the evidence matches where the factory is located
• Checked whether other factories in the same area are operating
• Demanded a written account of the mitigation measures the factory took
• Obtained photos of the volume in progress by production stage

When deciding how to respond

• Considered whether partial shipment can bring the urgent volume forward
• Secured and compared quotes and lead times from alternative factories
• Discussed the additional cost of air freight and how it would be split
• Gave buyers and customers advance notice of the possible delay
• Marked the date the duration cap is reached on the calendar
• Confirmed the agreed revised delivery date in writing

When moving to termination or settlement

• Inspected the quantity and condition of work in progress, or verified it by video
• Separated exclusive raw materials from general stock to narrow the deduction
• Demanded material purchase receipts as the basis for any deduction
• Confirmed the location and condition of tooling and buyer-supplied materials
• Considered taking shipment of completed units first
• Recorded the settlement amount and refund schedule in a signed written agreement

Closing - you can only write the clause before the accident

Suggest reworking a force majeure clause and the usual reply comes back: how often does that really happen? Fair enough. Most orders finish without a typhoon or a blackout anywhere near them.

But the value of this clause is calculated from the amount at stake when it fires, not from how often it fires. Lose the entire selling window because one seasonal run slipped three weeks and that single order costs more than years of contract maintenance. It works like an insurance premium. You pay it in advance hoping never to use it.

There is one more constraint on this clause: timing. You cannot rewrite the wording the day after the typhoon. By then the factory is standing in the stronger position and you are the one who needs something. The clause can only be touched when nothing is wrong, at the moment both sides are pleasantly exchanging a contract.

The order we recommend in practice is this. Open the contract you are using right now and find the force majeure clause. If there isn't one, that is the biggest finding of all. If there is, check four things only: whether the notice deadline is written as a number, whether the duty to mitigate is in there, whether there is a duration cap and a termination right, and whether the deposit refund deadline is stated. More contracts than you would expect are missing two or more of those four.

GreenFrog Seoul reviews contract language with Chinese factories and works alongside importers on the practical response to force majeure and delivery delays. If you have already received a delay notice, we start with the evidence review and the shape of the negotiation; if you are still pre-contract, we work with you from the clause design stage.