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Force majeure flyer

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Force majeure flyer

What is Force Majeure?

The term ‘force majeure’ is a French term which means ‘superior force.’ It refers to an event or effect that can be neither anticipated nor controlled. The term includes both acts of nature and acts of people, including but not limited to natural disasters, riots etc.

How to determine applicability of Force Majeure?
Force Majeure Clause present in Contract No Force Majeure Clause in Contract
  • In such conditions, the Clause in the Contract/ Agreement will define the scope of applicability of the principle of Force Majeure.
  • The Force Majeure clause could either list a number of events in which it could be applicable or it could provide a broad interpretation of what events come under the ambit of this clause.
  • It is the language of the clause that enumerates the application of the principle and also defines its scope
  • There is a need for thorough review of the Contract/ Agreement to determine the exact applicability on case to case basis.
  • The Force Majeure Clause may be implied in the Contract based on the circumstance of the case.
  • In such conditions, one may rely on Section 56 read with Section 32 of the Indian Contract Act, 1872.
  • On taking into consideration the nature of Contract/Agreement, appropriate review and also the circumstances at which the force majeure event has occurred, it will be determined whether the Contract is void, Frustrated or whether a compensation is to be provided to any one of the parties.
  • To take shelter under Section 56 of the Indian Contract Act, it must be ensured that the parties have entered into a Contract/ Agreement wherein the force majeure event has disrupted the performance of its Terms.
Pre-Requisites to invoke Force Majeure?
  • Parties must have a valid Contract / Agreement.
  • The Contract/ Agreement is yet to be performed.
  • The Force Majeure event should have been an unforeseen event.
  • There is a normal duty of the parties to mitigate the effects of the force majeureevent and there must be substantial reason to prove that the said event is the cause of non – performance/ impossibility of the Contract.
  • Impossibility does not mean physical or literal impossibility but that the event may have totally upset the very foundation of the Contract/ Agreement.
  • The Force Majeure event leading to non-performance need not necessarily conclude in termination of the Contract. It is based on the terms of the contract and the circumstances of the force majeure event.
  • There is always an alternative to renegotiate or to temporarily suspend the Contract/ Agreement than to blindly terminate it.