Yara Nipro Pty Ltd v Interfert Australia Pty
Ltd  QCA 128
Companies in every industry may face delays caused by weather,
suppliers, subcontractors and other unforeseeable delays. Contracts
often consider the occurrence of such delays by providing a
'force majeure clause' for instances where delay is
considered to be beyond the reasonable control of either party. A
recent Queensland Supreme Court decision has highlighted that in
such circumstances the drafting of a clause will play a crucial
role in assessing whether a 'force majeure clause' will
operate to limit liability for delays caused by events seemingly
outside either party's control.
Interfert Australia Pty Ltd ('Interfert') agreed to
supply Yara Nipro Pty Ltd ('Yara') with goods. Interfert
then subcontracted with another supplier, who agreed to supply
Interfert with the required goods
The sub-supplier failed to deliver the goods to Interfert, and
Yara then sought to hold Interfert liable for the subsequent
failure to supply it with the goods
Interfert attempted to rely on a force majeure clause and
argued that the failure of the sub-supplier to deliver the goods
was out of their control
The clause provided that neither party would be liable for any
delay in or failure to perform any of its obligations under the
contract 'if such a delay or failure was caused by
circumstances beyond that party's reasonable control'. The
clause contained a non-exhaustive list of circumstances which would
constitute a delay, including 'non-supply to Interfert of
The Court held that Interfert was liable for the damage despite
the existence of the clause because the phrase 'nonsupply to
Interfert of product' did not 'direct attention only to the
arrangements Interfert had made to obtain product from a particular
supplier'. The clause was conditioned on the further
requirement that Interfert needed to prove that the non-delivery
was 'caused by circumstances beyond its reasonable
Interfert could have avoided the delay by sourcing the product
from another subsupplier
As such, the delay was not caused by circumstances out of
Interfert's reasonable control and therefore, the Court found
that it would have been reasonable to source the goods from another
How does it affect you?
To benefit from a force majeure clause in the case of non-supply
by a particular supplier, such non-delivery will have to be
explicitly expressed in the relevant clause. The case also
highlights the importance of proper drafting of contractual clauses
if they are sought to be relied upon at a later time.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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