Force Majeure, Or Beeminder’s SOS Clause

Friday, July 1, 2011
By dreeves

Force Majeure, and a lightning bolt (that unexpectedly zaps you, providing legitimate grounds for pausing your yellow brick road)

[UPDATE 2015: We’ve learned that we don’t need to be this uptight or hard-nosed about derailments. Just reply to the email asking if the derailment was legit and say why you don’t consider it to be. We will believe you. If you want something closer to the original vision articulated in this old blog post then you’ll want to check the “weaselproof me” checkbox.]

Economists have been wondering for at least half a century why we don’t see more use of commitment devices in the real world. In 1955, one economist [1] speculated that the reason is risk and uncertainty, “both as to future tastes and future opportunities.” [2] We’ve been thinking hard about how to solve that problem — how to use commitment devices with minimal risk that you’ll regret it — and we have a multi-pronged approach worked out.

We’re now going to lay out one of those prongs: a generous clause in the standard Beeminder commitment contract that lets you immediately pause your yellow brick road if something truly unexpected happens. It’s a tricky balancing act though. You want something solid enough that you’ve truly committed yourself to your goal and can’t weasel out whenever a friend bakes some brownies (or whatever). But you also want to retain as much flexibility as possible.

To that end, here’s the current version of Beeminder’s force majeure clause:

If something truly unexpected happens, such as physical injury, that prevents you from staying on your yellow brick road you can make your road immediately become flat. To mitigate this otherwise abusable loophole, there are two conditions on invoking the force majeure clause (also known as the SOS clause).
 
First, you have to notify Beeminder before you officially lose. Preferably send an email to support@beeminder.com but if you’re in the hospital or something and that’s not possible, text or, if really necessary, call 646-535-BEEM. You can also tweet to @bmndr. Or if the emergency is so severe that it’s not reasonable to notify Beeminder before you lose, you can provide a doctor’s note or death certificate or similar within 14 days.
 
The second condition is that you explain in 140 characters what happened that warrants the exemption. A panel of disinterested judges will determine whether your excuse is legitimate, i.e., whether it really couldn’t have been anticipated and whether an exemption is within the spirit of this contract. The point of the 140-character limit is both to make it simple for the judges and because the excuse has to be something stark and obvious like “I broke my leg”, not some kind of convoluted confluence of craziness at work and bad luck. An excuse at all resembling “I got really busy” won’t fly.
 
The litmus test for whether an excuse is legitimate is “Had I considered the possibility of the Unexpected Thing happening, would I have specified an exemption in the original contract?”

We’ve revised that many times, usually to make it more generous as we’ve found that no one seems to have much inclination to abuse it, even with high-stakes contracts. That may be because we have a somewhat tight-knit group of beta users trying this stuff out. But even as we scale up we’re inclined to err on the side of being too generous with the SOS clause. After all, if someone wants to be a lame-o weasel about it they can just have their money back. [3] Beeminder is just not for them.


Thanks to Mara A Smith Esq., LLM for reviewing our contract language.

Footnotes

[1] It was Robert Strotz and if you actually wanted to know that then you should check out the Further Reading section of the inaugural post on this blog which we’re continuing to update, such as with the 1955 paper by Strotz just alluded to.

[2] The uncertainty about how our preferences or our circumstances may change is a very legitimate reason to eschew commitment devices, but there’s evidence that we tend to go way overboard in trying to retain flexibility / keep options open / not close doors.

[3] Several distinctly non-weaselly beta users have expressed the fear that if push came to shove they’re not really sure they wouldn’t weasel. Well, the fact that they’re worried about it puts a bound on how bad this problem can be. Namely, they very much don’t want to have to weasel and that itself is pretty good motivation to stay on the yellow brick road and keep the question moot.


 

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