Force Majeure: Definition and Meaning

The term “force majeure” became pretty popular during the covid-19 crisis. The pandemic not only affected the daily lives, businesses, and global economy, but also became the threat of human lives on a global level. The parties could not perform their contractual obligations because of lockdown and health safety restrictions, which usually can be considered as the breach of contract. But to help all these people who are in some sort of contract and not able to perform their part because national and international emergencies, the French term “force majeure” come into picture.

What does Exactly “Force Majeure” Describe?

“Force majeure” is a French term and its literal meaning is “greater force” or “overwhelming force.” In legal words, it is defined as, “an event or effect that can be neither anticipated nor controlled.”

In contract law, force majeure is a common clause of every contract, which essentially frees both parties from the contractual liability or obligation on the occurrence of an unseen and unpredictable event or circumstance, which is normally beyond the control of either parties. For example, a war, strike, riot, crime, epidemic, or sudden legal change. Any such event naturally prevents one or both parties from performing their obligations as per their contractual agreement.

However, the term force majeure explicitly excludes any event described as an act of God, because it is a separate domain and legally differs, but it is also related to contract law. Further, in practice, most force majeure clauses do not excuse a party's non-performance in entirety, but rather suspend it until the force majeure remains in action and after that they are obliged to perform their part. But if it is a time specific contract, which automatically lapses with passage of time, then of course excuses both parties in entirety.

Examples of Force Majeure

There are various examples of force majeure and significant of them are −

Essential Elements of Force Majeure

To prove force majeure, the following conditions must be fulfilled −

• That there has been an unforeseen event.

• That because of abovementioned event, the parties have been prevented, hindered from performing their obligation.

• That the circumstances of an event were beyond their control.

• That no number of reasonable steps could have been taken.

Force Majeure in Indian Jurisprudence

Though the term “Force Majeure is not defined anywhere in the Indian Statutes, but more often correlated with the doctrine of frustration of contract. In Indian jurisprudence, the concept of force majeure can be correlated with the provision defined under section 56 of the Indian Contract Act of 1872. Section 56 of the Act states that

“A contract to do an act which, after the contract is 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.”

The examples of this provision may be include natural disasters, war, pandemics, and other unforeseen circumstances.

Likewise, Indian law recognizes force majeure as a valid defense for non-performance of contractual obligations, but it is not universal in nature. In other words, the specific provisions and conditions for invoking force majeure can vary depending on the terms of the contract and the specific circumstances of each case. For example, the contract may specify the types of events that qualify as force majeure, the procedures for invoking force majeure, and the consequences of non-performance due to force majeure.

It is important to note here that Indian law also recognizes the principle of frustration, which is similar to the French term force majeure, but applies to situations where an unanticipated and unpredictable event occurs after the contract has been signed and makes it impossible to perform the contract. The doctrine of frustration is governed by Section 56 of the Indian Contract Act, 1872, which provides that a contract becomes void if its performance becomes impossible due to an event beyond the control of the parties.

Difference Between Force Majeure and Frustration of Contract

The doctrine of Force Majeure is often confused with the doctrine of frustration of contract or impossibility to perform. The contract is said to be frustrated if the performance of contract became impossible. The performance of an act may not be literally impossible, but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view.

The impossibility or frustration of a contract comes under section 56 of the Contract Act whereas, the force majeure is a clause in form of contractual provision saving the parties in cases of out of their control. Furthermore, if the contract does not expressly or impliedly talk about exemptions for non-performance in the case of Force Majeure, a party seeking to set up a defence, the contract, can place reliance on Section 56 of Contract Act on the reasoning that, the intention of Force Majeure is to save the performing party from consequences of some event beyond its control that resulted into the performance of a contract.

Conclusion

In conclusion, force majeure and frustration, definitely are important principles in Indian legal system that provide a defense for non-performance of contractual obligations caused by the event, which is beyond the control of the parties involved. However, the specific provisions and conditions for invoking these defenses can vary, as it depends on the terms of the contract and the specific circumstances of each case.

FAQs

Q1. What are the major elements of force majeure?

Ans. Following are the major essential elements of force majeure −

• Unforeseeability − The event that constitutes force majeure must be unforeseeable and beyond the control of the human beings.

• Impossibility of performance − The event must be of such type that makes it impossible or impracticable for one or both parties to perform their contractual obligations.

• Irresistible and overwhelming character − The event must be of such a nature that it cannot be prevented or controlled by the exercise of reasonable care or caution.

• External cause − The event must be occurred naturally or caused by some external factors and essentially not by the act or default of either party.

• Contractual agreement − last but not the least, there must be a contractual agreement between the parties and it recognizes force majeure as a defense for non-performance of contractual obligations.

Q2. Is force majeure a law?

Ans. Force majeure, that refers to an extraordinary event or circumstance that is beyond the control of the human beings, is not a standalone law, but of course, it is a principle that incorporated into contract law and hence, governed by the contract law.