Force Majeure is a French term that means “an event or effect that can neither be anticipated nor controlled”. Some lawyers or authors define force majeure as “An act of God”, this French term literally means “superior forces”. In law, it includes all kinds of acts of God, Unavoidable Disasters. These also include natural disasters, acts of God, epidemics or pandemics and war. Force Majeure is an avoidable circumstance, in which any person does not have any control of it. Generally, this term is used in the contract because many times in a contract there are many situations in which due to unavoidable circumstances requirements of contracts are not fulfilled, during these times this force majeure plays a major role. Now in times like this in pandemic force majeure plays a major role in many of the contracts, situation can get out of hand at any time at any place so any person entering into a contract in this pandemic situation needs to understand what force majeure is and needs to include this in their contract so to avoid any unwanted situation with another party.
USE IN LAW
In Indian law Force Majeure is not specifically defined or mentioned in any of the sections but it can be found in Section 32 of the Indian Contract Act, 1872. Section 32 tells us that “Contingent Contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened”. This section in the Indian contract act not particularly defines Force Majeure but is the one that has the closest meaning to it.
According to law street India “A force majeure clause in contract exempts both parties from their contractual liability or obligation when prevented by such an unforeseeable event from fulfilling their obligation. A force majeure clause does not always exempt the party from non-performance, but only suspends it from the duration of force majeure event”.
In section 56 of Indian Contract Act, 1872 it has been said that an agreement to do an impossible act in itself is void “A contract to do an act, which after the contract is made, become impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes unlawful or impossible”. This section also deals with force majeure it tells us about an agreement becoming void if the act becomes impossible to do or because of any event which the Promisor could not prevent. This section of the Indian contract act makes us clear as to what happens in case of an event when some acts become impossible to be fulfilled.
In Energy Watchdog and ors v/s Central Electricity Regulatory Commission and ors, Supreme Court observed that Force majeure is governed by Indian Contract Act 1872. In so far as it is relatable to express or implied clause in a contract, it is governed by chapter Ⅲ of the act dealing with contingent contract and more specifically in section 32 and is dealt under section 52 of the same act. In this case, basic fundamental features of the fulfilment of the contract were not altered, the only thing that was observed was an increase in the price of coal, alternatives modes to perform the contract was available but at a higher price. It was held that parties when they enter into a contract they take the risk knowingly and at the time of entering into a contract like this they know the possibility or event that can happen like this hike in price cannot be considered as a force majeure.
In Standard Retail Pvt. Ltd. v/s Gs Global Corp and ors 08/04/2020, Bombay high court refused to grant interim measures to the petitioner observing that the commodity in question was an essential item during the lockdown and lockdown is only for a limited period, the commodity is a useful and essential item during lockdown so the petitioner would not face any difficulty during the lockdown as the government has recognized this commodity as an essential item. Consequently, the Petitioner cannot resile from its contractual obligation of making payments to the Respondents.
- VAIBHAV PRAKASH
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