Case Law Research On Force Majeure Clause

CASE LAW RESEARCH ON FORCE MAJEURE CLAUSE
S.No Case Particulars Holding (Relevant Paras)

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01. Satyabrata Ghose v. The relief is given by the court on the ground of subsequent impossibility when it finds that the
Mugneeram Bangur & Co. whole purpose or basis of a contract was frustrated by the intrusion or occurrence of an
and Anr. unexpected event or change of circumstances which was beyond what was contemplated by the
parties at the time when they entered into the agreement.
1954 SCR 310
Supreme Court of India
02. Energy Watchdog v. CERC & 35. In M/s Alopi Parshad & Sons Ltd. v. Union of India, 1960 (2) SCR 793, this Court, after setting
Ors. out Section 56 of the Contract Act, held that the Act does not enable a party to a contract to ignore
the express covenants thereof and to claim payment of consideration, for performance of the
(2017) 14 SCC 80 contract at rates different from the stipulated rates, on a vague plea of equity. Parties to an
executable contract are often faced, in the course of carrying it out, with a turn of events which
Supreme Court of India they did not at all anticipate, for example, a wholly abnormal rise or fall in prices which is an
unexpected obstacle to execution. This does not in itself get rid of the bargain they have made.
It is only when a consideration of the terms of the contract, in the light of the circumstances
existing when it was made, showed that they never agreed to be bound in a fundamentally
different situation which had unexpectedly emerged, that the contract ceases to bind. It was
further held that the performance of a contract is never discharged merely because it may
become onerous to one of the parties.
03. Surinder Laali & Ors v. 9. Another point agitated on behalf of the respondent was that no doubt there is delay in delivery of
Parkwood Developers possession, but, the same was on account Force-Majeure as the construction and development work
suffered not only in Punjab, but, other parts of the country due to non- availability of the
Complaint No.ADC 1496/2019 construction material and as such, the said delay could not be attributed to the respondents being
beyond their control. However, the argument advanced on behalf of the respondent is without merit
RERA Punjab because the present case is not shown to be covered within the Force-Majeure conditions. 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.' While force majeure has neither been defined nor specifically dealt
with, in Indian statutes, some reference can be found in Section 32 of the Indian Contract Act (the
"Contract Act") envisages that if a contract is contingent on the happening of an event which
event becomes impossible, then the contract becomes void. From a contractual perspective, a
force majeure clause provides temporary reprieve to a party from performing its obligations
under a contract upon occurrence of a force majeure event. A force majeure clause typically
spells out specific circumstances or events, which would qualify as force majeure events,
conditions which would have be fulfilled for such force majeure clause to apply to the contract
and the consequences of occurrence of such force majeure event. As such, for a force majeure
clause to become applicable (should any force majeure event occur), the occurrence of such
events should be beyond control of the parties and the parties will be required to demonstrate.
that they have made attempts to mitigate the impact of such force majeure event. If an event or
circumstance comes within the ambit of a force majeure event and fulfils the conditions for
applicability of the clause then the consequence would be that parties would be relieved from
performing their respective obligations to be undertaken by them under the contract during the
period that such force majeure events continue. Further consequential liabilities, depending on
the language of the clause, the parties may be required to issue a notice formally intimating the
other party of the occurrence of such event and invocation of the force majeure clause.

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CASE LAW RESEARCH ON FORCE MAJEURE CLAUSE

S.No Case Particulars Holding (Relevant Paras)

Supreme Court of India

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