Force Majeure Clause

A contract clause that excuses a party from performing contractual obligations due to unforeseen, unavoidable events outside their reasonable control (e.g., war, natural disasters, epidemics, statutory bans).

Legal Enforceability Under Indian Law

Force Majeure is not defined as an independent statutory term in India; it is governed under Section 32 (contingent contracts) if written into the agreement, or Section 56 (doctrine of frustration) if absent. Indian courts enforce Force Majeure narrowly; economic unviability or financial hardship is not an excuse.

Standard Sample Clause Language

Neither party shall be liable for any failure or delay in performing its obligations under this Agreement if such failure arises out of an event beyond its reasonable control ("Force Majeure Event"), including acts of God, floods, earthquakes, wars, armed conflicts, epidemics, or government shutdowns. The affected party must give written notice within seven (7) days of occurrence. If the Force Majeure Event persists for more than sixty (60) consecutive days, either party may terminate without liability.

Common Drafting Pitfalls to Avoid

✕Not requiring prompt written notice with evidence of the force majeure event.
✕Failing to provide a termination exit if the event continues beyond 30 to 60 days.

Frequently Asked Questions

Does price increase or market inflation qualify as Force Majeure in India?

No. The Supreme Court in Energy Watchdog vs. CERC established that commercial difficulty, price escalations, or onerous economic conditions do not constitute Force Majeure or frustration of contract.

Related Commercial & Legal Terms

Liquidated Damages →

A predetermined, genuine pre-estimate of loss agreed upon by the contracting parties at the time of signing, payable as compensation in the event of a specific contractual breach (such as delivery delay).

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