Any cause which is beyond the control of the contractor or the owner, as the case may be, which they could not foresee or a reasonable amount of diligence could not have foreseen and which substantially affects the performance of the contract, is called
- Aletter of intent
- Bliquidated damage
- Cforce majeureCorrect
- Dwarranty period
Solution
Concept
Force majeure clause
Step-by-step solution
1. An unforeseeable event beyond the control of both parties that affects the contract is force majeure (such as floods, war or earthquake).
Explanation
Force majeure clauses excuse or suspend performance when extraordinary events outside the parties' control occur.
Why the other options are wrong
A letter of intent is a preliminary commitment, liquidated damages are pre-agreed penalties for delay, and the warranty period is the period of defect liability.
Shortcut
Force majeure = act of God / beyond control.
Common mistake
Choosing liquidated damages.
Correct answer: C) force majeure