FORCE MAJURE CLAUSE OF A CONTRACT by Mahek Upadhayay@LexCliq

The term “Force Majure’ is a French word having its origin from ‘vis major’ which means ‘Act of God’. The former, however, is a wider term than the latter .While a contract between parties is in force, some situations may arise beyond the reasonable control of the parties. These situations can be general, referring to events that are beyond the reasonable control of the parties such as flood, war, fire or similar events or combination of both which sometimes tend the performance of the contract, impossible. Such events are Force Majeure events.

INSTANCES OF FORCE MAJURE UNDER CONTRACT ACT

section 56 of Indian Contract act imbibed in itself the doctrine of frustration that discharges two parties from the contractual obligations as occurrence of such events made it impossible to perform the terms of the contract. This section read as folows:.

56. Agreement to do impossible act – An agreement to do an act impossible in itself is void.

Contract to do act afterwards becoming impossible or unlawful. A contract to do an act which, after the contract made, becomes impossible or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

Compensation for loss through non-performance of act known to be impossible or unlawful. Where one person has promised to do something which he knew or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promise for any loss which such promisee sustains through the non-performance of the promise.”

Per section 32, a party to a contract which contains a Force Majeure clause must prove the following:

(a) that the event which caused non-performance must be included in the force majeure clause;

(b) the non-performance was caused due to the said event;

(c) the non-performance was beyond the party’s control, and

(d) that there existed no alternative mode of performance.

For invoking Section 56, there needs to be a valid contract, the performance of the contract has not been completed  or must have been partially completed, the said performance becomes impossible by way of facts or law, the subsequent event is beyond the control of the party who intends to claim frustration and no reasonable steps could mitigate subsequent events.

FORCE MAJURE CLUASE 

For taking a defence of force majure, the party needs to include a force majure clause in the agreement to be signed. And it is only after these future conditions on the occurrence of which the very object of the contract cannot be achieved has been signed by the acceptor and if those conditions do occurred then the proposer can invoke the defence under force majure clause saying that the acceptor has already agreed to the condition occurred due to certain circumstances.

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