Some of you may have read my previous articles on Summit’s Force Majeure Gamble: A Pattern Emerges, CSBP’s Force Majeure Gamble: Contracts, Conflict and Consequence and Urea $1400: Going…. Going ….Gone.

The response on social media has been staggering, with the algorithms going off the charts — which tells me I have hit a nerve. Even more interesting are the stories of urea that can be sourced if you look hard enough and are prepared to pay enough. That can still be purchased and shipped to Australia — but that story is for another day.

What I will dwell on, with the help of my good friends Harvey AI and Lexis+ AI — the go-to paralegals that every cunning law student, not to mention expensive law firms, use to draft papers and impress lecturers, clients and judges — is the case law around the decisions of CSBP and Summit.

No doubt their highly paid lawyers will be unimpressed and claim there is nothing to see. But if they were confident of their position, both companies might have drafted detailed rebuttals to my previous articles and published them in Farm Weekly.

Farm Weekly won’t print my articles on this topic as no doubt I am bad for business — but my business is calling out poor decision-making, and calling force majeure too early, when urea is available, looks very much like one of those decisions.

So here goes, with my AI law hat on.

As I have already stated, there is a moment in every commercial dispute where the fog lifts and the issue becomes stark: is this a case of genuine impossibility, or simply a party walking away from a bad bargain? In the unfolding fertiliser dispute affecting Western Australian growers, that moment is approaching.

The invocation of force majeure by suppliers such as CSBP and Summit is not, in itself, unlawful. It is a recognised contractual mechanism with deep historical roots, tracing back to the Napoleonic Code and the doctrine of vis major. But as the courts have repeatedly made clear, force majeure is not a commercial escape hatch. It is a narrow doctrine, confined to circumstances where performance is truly prevented — not merely rendered less profitable.

The High Court has long emphasised that contractual obligations are to be honoured according to their terms. In Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, the Court made clear that the allocation of risk within a contract is central to its enforcement. Where a party has assumed a risk — whether explicitly or as part of the commercial context — it cannot later avoid that risk simply because it has crystallised in an unfavourable way.

That principle sits uncomfortably with the current position of CSBP and Summit.

As I have detailed at length in recent commentary, global fertiliser markets have not ceased to function. Supply continues to exist. Cargoes continue to move. The issue is not physical impossibility — it is price. And courts have consistently drawn a bright line between the two. In Tennants (Lancashire) Ltd v CS Wilson & Co Ltd [1917] AC 495, it was held that increased cost or difficulty does not amount to frustration or impossibility. That remains good law.

The same reasoning applies to force majeure. If product can be sourced — albeit at a higher price — the legal threshold for invoking force majeure is unlikely to be met.

This is where the factual matrix becomes critical.

Both CSBP and Summit appear to have continued writing contracts, and in some cases varying them, while relying on increasingly fragile supply chains. The pivot toward Chinese-sourced UAN, despite a well-documented history of export restrictions, raises a question courts are well accustomed to asking: was the risk truly beyond control, or was it a foreseeable commercial exposure that was knowingly assumed?

As noted in the analysis of Summit’s position, the absence — or at least weakness — of an express obligation to take “reasonable endeavours” to mitigate supply disruption is striking. However, its absence in drafting does not end the inquiry. Courts will often imply a standard of reasonableness, particularly in commercial contracts, and will scrutinise the conduct of the party seeking relief.

In Channel Island Ferries Ltd v Sealink UK Ltd [1988] 1 Lloyd’s Rep 323, the Court held that a party cannot rely on a force majeure clause where it has failed to take reasonable steps to avoid or mitigate the event’s impact. That reasoning has been influential in Australian jurisprudence and reflects a broader principle: contractual rights must be exercised honestly and reasonably.

Applied here, the question becomes unavoidable: what steps were taken to secure alternative supply? Were tenders entered into? Were higher-priced cargoes actively pursued? Or was procurement deferred in the hope that prices would soften?

If the latter, the legal position becomes materially weaker.

A further avenue of potential liability arises in misrepresentation or misleading conduct. Under section 18 of the Australian Consumer Law, a corporation must not engage in conduct that is misleading or deceptive. If contracts were entered into, or varied, on the basis that supply would be available — without disclosing the increasing fragility of that supply — there is a credible argument that growers were not placed in a position to make informed commercial decisions.

The failure to disclose a material shift in risk profile — particularly where that risk is being transferred downstream — has been fertile ground for litigation. In Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 39 FCR 546, the Court held that silence can, in certain circumstances, amount to misleading conduct where there is a reasonable expectation of disclosure.

Here, growers might reasonably ask: were they given the opportunity to choose between higher-cost, lower-risk supply and lower-cost, higher-risk alternatives? Or were they simply carried along until the risk crystallised?

That question goes directly to the heart of any potential claim.

From a contractual perspective, the remedies available are well established. A wrongful invocation of force majeure may constitute repudiation — an indication that a party does not intend to perform its contractual obligations. In such circumstances, the innocent party is entitled to terminate and seek damages.

Those damages would typically be assessed on the basis of the cost of cover — that is, the difference between the contracted price and the market price of replacement product. In a rapidly rising market, that differential can be substantial.

There is also the possibility of claims framed in negligence, particularly where a supplier has assumed responsibility for procurement and supply chain management. While more complex, such claims would focus on whether the supplier failed to exercise reasonable care in structuring and managing its supply arrangements.

What is clear is that this is not a binary issue. It is not simply a question of whether force majeure applies or does not apply. It is a question of degree, conduct and commercial judgment.

Notably, not all market participants have taken the same course. The absence of a force majeure declaration from other suppliers raises an evidentiary question that would not be lost on a court: if others operating in the same market, subject to the same global conditions, have continued to perform, what distinguishes those who have not?

That comparative analysis often proves decisive.

None of this is to suggest that litigation is inevitable — or even desirable. Courts are a blunt instrument for resolving what is, at its core, a commercial problem. There is a strong case for negotiated outcomes, for transparency in pricing and supply, and for a more equitable sharing of risk between suppliers and growers.

But negotiation requires leverage. And leverage, in turn, requires a clear understanding that legal remedies exist and are capable of being pursued.

The reality is that individual growers, acting alone, face significant barriers — cost, complexity and asymmetry of information. Collective action, whether formalised through representative proceedings or coordinated negotiation, offers a more practical pathway.

The law in this area is not uncertain. It is well developed. Contracts mean what they say. Risk lies where it falls. And force majeure is not a doctrine courts apply lightly.

If suppliers have made commercial decisions that have contributed to their inability to perform — if risks were foreseeable, if mitigation was inadequate, if disclosure was lacking — then the legal exposure is real.

And it is growing.

But I may well be wrong, and the respective companies may be well within their rights to call force majeure.

Their deafening silence, however, when it comes to explaining why they cannot find alternative supply — when even a simple search of traders shows thousands of tonnes available in bulka bags and shiploads — raises its own questions. Maybe those offers are bogus. Maybe not.

Watch this space. Because even one trader locking in a deal for a few thousand tonnes will raise a far more uncomfortable question: how is it that smaller players can find supply, while the full trading horsepower of CSBP and Summit has remained silent for so long?

If farmers are interested in exploring collective action rather than proceeding alone, they are encouraged to contact Phil Brunner from Bailiwick Legal: phil@bailiwicklegal.com.au.