TEC Olmos contracted to drill for ConocoPhillips but missed the deadline and faced $500,000 in liquidated damages. Olmos tried to invoke a force majeure clause, claiming market conditions prevented performance. The Texas Court of Appeals ruled that foreseeable market downturns—like oil price drops—do not qualify as force majeure events. The court enforced the liquidated damages clause, establishing that force majeure only covers truly unforeseeable events beyond reasonable control.
Market downturns and commodity price fluctuations are legally foreseeable and cannot excuse performance under force majeure clauses, even if they make the work unprofitable.
Force majeure catch-all provisions require proving the event was genuinely unforeseeable and beyond reasonable control—not just difficult or expensive to perform.