Define: Government Order
In a contract, a Government Order is any binding directive, ruling, decree, judgement, regulation, or other official issuance from a court, regulator, or public authority that affects the parties' obligations. Contracts reference Government Orders to allocate responsibility for compliance, to excuse performance disrupted by such orders, and to trigger notice or renegotiation duties.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What Government Order Means in a Contract
A Government Order clause identifies official acts of public authorities that can alter, suspend, or terminate contractual duties. This includes statutes, regulations, executive decrees, judicial judgements, administrative rulings, licensing decisions, and enforcement notices. The term is broad by design, capturing any binding instruction from a body with legal authority over the parties or their activities.
Parties use this language to draw a line between commercial risks they control and external legal risks imposed on them. When a Government Order changes the legal landscape, such as a new licensing requirement or an embargo, the contract needs a mechanism to address who bears the cost, whether performance is suspended, and how long any adjustment lasts.
The clause also clarifies which authorities count. Some agreements limit the definition to orders from national or supranational bodies, while others extend it to local authorities, regulators, or specialised tribunals. This scope decision materially affects how often the clause is triggered.
How Government Order Is Defined or Measured
Most contracts do not measure a Government Order numerically; instead, they define it by source and form. A well-drafted definition lists the types of instruments included, such as statutes, statutory instruments, decrees, judgements, injunctions, and administrative directions, and specifies that the order must be legally binding rather than advisory guidance.
Some agreements add qualifying criteria, for example requiring that the order be issued by a body with jurisdiction over the affected party, or that it be final and not subject to appeal. Others distinguish between orders that are generally applicable, like new legislation, and orders directed specifically at one party, like a Relevant Circumstances
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