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A Critical Analysis on Force Majeure Clause in Current Scenario

By Abhinav Trehan (Advocate)

Adhivakta Law Chamber


The Force Majeure clause is the provision in a contract that removes the duty of performing the terms of the contract in certain circumstances. To determine what all factors are being covered by the Force Majeure Clause one needs to very clearly examine the Force Majeure clause in the contract. Each Contract has to be very strictly examined about the inclusiveness of factors in the Force Majeure Clause.


The term ‘Force Majeure' has been defined in Black’s Law Dictionary, as ‘an event or effect that can be neither anticipated nor controlled. It is a contractual provision allocating the risk of loss if performance becomes impossible or impracticable, especially as a result of an event that the parties could not have anticipated or controlled.’


If in case there is no force majeure clause in the contract, In that scenario, we need to examine on the basis of contract law and features such as impossibility and frustration.


A force majeure clause in a contract would typically include an exhaustive list of events such as acts of God, war, terrorism, earthquakes, hurricanes, acts of government, explosions, fire, plagues or epidemics, etc.


It is often seen that the Force Majeure clause is being interpreted in a very narrow sense by the courts. The Force Majeure clause always comes into the field, when there is an impossibility of fulfilling the obligation of the contracts. The Conditions are of such nature that is beyond the control of the Party.


The Force Majeure Clause is not applicable in the below factors:


1. Force Majeure Clause is not applicable to excuse negligence or other malfeasance of the party.

2. Force Majeure Clause is not applicable in case Contract becomes financially or commercially difficult to perform.


The Force Majeure clause is applicable in the below conditions.


1. Terms of Contract cannot be fulfilled by Force Majeure event.

2. The events are beyond the control of the Parties.

3. No Alternative mode of performances is available.


In today's scenario when there is lockdown being imposed by various states, the Forces Majeure Clause becomes very important, and in case of impossibility of performing the duties under the contract Force Majeure clause is applicable.


References.

1.https://economictimes.indiatimes.com/small-biz/legal/what-is-force-majeure-the-legal-term-everyone-should-know-during-covid-19-crisis/articleshow/75152196.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.

2.https://www.venable.com/insights/publications/2011/02/understanding-force-majeure-clauses.

3. https://www.pinsentmasons.com/out-law/guides/covid-19-force-majeure-clause.

4.https://www.mondaq.com/india/litigation-contracts-and-force-majeure/926356/legal-principles-in-invoking-force-majeure-clauses-case-law-analysis.



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