What does "Force Majeure" mean and how it will affect the businesses all around the world during COVID-19?

Introduction:       In every contract there is clause which removes the liability for natural and unavoidable event for the fulfillment of the contract. Force Majeure means those event which are uncontrollable such as War, Extreme weather, Act of God etc.

                             In this context it is important to decide that whether COVID-19 will be considered as a Force Majeure event or not.

Definition:           The Force Majeure term is a French term which also relevant in Indian Contract Act, 1872 under Section 32. The Enforcement of contracts contingent on an event happening. The events which is beyond the control of human being such as Natural Calamity, War.

How its affect:     There are lots of contract were enforce in day to day life especially when we talk about commercial contracts. In every contract there is a clause of Force Majeure which define as above.  In this Pandemic situation like COVID-19 the supply chain were disrupted and due to this the performance of the contracts were delayed. For this the suppliers facing lots of problems and contracts may seek to delay or they were avoid to performance of the contract, duty. And they make Covid-19 as an excuse to extricate themselves from their obligation.

                             Further that Companies also facing the problems because of the suppliers' non-performance of the contract and companies unable to perform their obligations towards the customers and this this affected to the prices of the product and it is a step which moves towards financial crises.

Conclusion:                   COVID-19 pandemic could make it more difficult for both the parties to perform their contractual duties. There is a way some of the contracts, If the contract will be put on hold for specific time or until the force majeure event is resolved then it will not affect that much.

                             There is another way that the contractual parties come together and resolve this dispute by Arbitration methods like price adjustment clause, limitation or exclusion clauses etc.