Dhanrajamal Gobindram v. Shamji Kalidas & Co.

AIR 1961 SC 1285

FORCE MAJEURE:

The contention raised in this case regarding the contract involved an actual or, at least, a contingent right to or acquisition of property abroad is not correct. In the opinion of the bench, the contract was not void for illegality.

The agreement is said to be void because of vagueness and uncertainty arising from the use of the phrase “subject to the usual force majeure clause”. The argument is that there was no consensus ad idem, and that the parties had not specified which force majeure clause they had in mind. We were taken through the Encyclopaedia of Forms and Precedents and shown a number of force majeure clauses, which were different. We were also taken through a number of rulings, in which the expression “force majeure” had been expounded, to show that there is no consistent or definite meaning. The contention thus is that there being no consensus ad idem, the contract must fail for vagueness or uncertainty. The argument, on the other side, is that this may be regarded as a surplusage, and, if meaningless, ignored. It is contended by the respondents that the addition of the word “usual” shows that there was some clause which used to be included in such agreements. The respondents also refer to Section 29 of the Indian Contract Act, which provides:

“Agreements, the meaning of which is not certain, or capable of being made certain, are void”.  They emphasise the words “capable of being made certain”, and contend that the clause was capable of being made certain, and ex facie, the agreement was not void.

BRITISH CASE REFERNCE:

McCardie, J. in a case has given an account of what is meant by “force majeure”, with reference to its history. The expression “force majeure” is not a mere French version of the Latin expression “vis major”. It is undoubtedly a term of wider import. Difficulties have arisen in the past as to what could legitimately be included in “force majeure”. Judges have agreed that strikes, breakdown of machinery, which, though normally not included in “vis major” are included in “force majeure”. An analysis of rulings on the subject into which it is not necessary in this case to go, shows that where reference is made to “force majeure”, the intention is to save the performing party from the consequences of anything over which he has no control. This is the widest meaning that can be given to “force majeure”, and even if this be the meaning, it is obvious that the condition about “force majeure” in the agreement was not vague. The use of the word “usual” makes all the difference, and the meaning of the condition may be made certain by evidence about a force majeure clause, which was in contemplation of parties.

Learned counsel for the appellants relies strongly on a decision of McNair, J. in British Industries v. Patley Pressings [(1953) 1 All ER 94]. There, the expression used was “subject to force majeure conditions”. The learned Judge held that by “conditions” was meant clauses and not contingencies or circumstances, and that there being a variety of force majeure clauses in the trade, there was no concluded agreement. The case is distinguishable, because the reference to force majeure clauses was left at large. The addition of the word “usual” makes it clear that here some specific clause was in the minds of the parties. Learned counsel also relies upon a decision of the House of Lords in Scammell (G.) and Nephew Ltd. v. Ouston where the reference to “on hire purchase terms” was held to be too vague to constitute a concluded contract. It will appear from the decision of the House of Lords that the clause was held to be vague, because no precise meaning could be attributed to it, there being a variety of hire purchase clauses. The use of the word “usual” here, enables evidence to be led to make certain which clause was, in fact, meant. The case of the House of Lords does not, therefore, apply. Both the cases to which we have referred were decided after parties had entered on evidence, which is not the case here.

This case is more analogous to the decision referred to in Bishop & Baxter Ltd. v. Anglo-Eastern Trading & Industrial Co. Ld., namely, Shamrock S.S. Co. v. Storey. In speaking of the condition there, Lord Goddard observed as follows:

“Abbreviated references in a commercial instrument are, in spite of brevity, often self-explanatory or susceptible of definite application in the light of the circumstances, as, for instance, where the reference is to a term, clause, or document of a well-known import like c.i.f. or which prevails in common use in a particular place of performance as may be indicated by the addition of the epithet ‘usual’ where ‘usual colliery guarantee’ was referred to in a charter-party in order to define loading obligations.”

The addition of the word “usual” refers to something which is invariably to be found in contracts of a particular type. Commercial documents are sometimes expressed in language which does not, on its face, bear a clear meaning. The effort of Courts is to give a meaning, if possible. This was laid down by the House of Lords in Hillas & Co. v. Arcos Ltd., and the observations of Lord Wright have become classic, and have been quoted with approval both by the Judicial Committee and the House of Lords ever since. The latest case of the House of Lords is Adamastos Shipping Co. Ltd. v. Anglo-Saxon Petroleum Co. Ltd. There, the clause was “This bill of lading”, whereas the document to which it referred was a charter-party. Viscount Simonds summarised at p. 158 all the rules applicable to construction of commercial documents, and laid down that effort should always be made to construe commercial agreements broadly and one must not be astute to find defects in them, or reject them as meaningless.

CONCLUSION:

Applying these tests to the present case and in the light of the provisions of Section 29 of the Indian Contract Act, it is clear that the clause impugned is capable of being made certain and definite by proof that between the parties or in the trade or in dealings with parties in British East Africa, there was invariably included a force majeure clause of a particular kind.