Latest Article

Force majeure Clause

Courtesy/By: Priyanka Bhattacharyya | 2020-06-27 00:57     Views : 314

Force majeure is a French concept whereby the parties to a contract are unable to perform their obligation for completing or fulfiling the terms set in the contract. Force majeure is a clause which is present in the contract and it is commonly used in the contract which generally frees both the parties to carry out their obligation in certain unforeseen circumstances which occurs due to act of God. In English and Scots law, force majeure is a creature of contract and not of the general common law. Force majeure is generally unavoidable and it is a chance occurrence. It is known as casus fortuitus in Latin which means chance occurrence. This clause is present in the contract as an implied clause or Expressed clause. The occurrence of this is an extraordinary event or circumstance beyond the control of the parties. Such as flood, earthquake, volcanic eruption, riot, strike, crime, epidemic, pandemic or any other situation by an act of god where it is not possible humanly for both the parties to fulfil the obligations of their contract. As the circumstances become inevitable or beyond control which leads to non- fulfilment of the contract by the parties. But the force majeure doesn't excuse the parties from the non-fulfilment of a contract's obligation rather they suspend it till the duration of a period of the unavoidable situation. It generally occurs due to a natural and unavoidable catastrophe that obstructs the normal course of events and prevent participants from fulfilling obligations. Whereas Force majeure here due to unavoidable or unforeseen circumstances the parties are unable to complete their obligation related to the contract during the critical time and other sensitive contracts are drafted to limit the shield of this clause where a party does not take reasonable steps (or specific precautions measures) to prevent or limit the effects of the outside interference or the external interference on the contract, either when they become likely or when they occur. Force majeure is a clause that is included in contracts to remove the liability of the parties under any natural and unavoidable catastrophes circumstances and extend to a certain limit. It also encompasses human actions, such as armed conflict or accidents. for events to constitute force majeure, there must be an unforeseeable external situation to the parties who have entered into the contract. These concepts are defined and applied differently depending on the jurisdiction. Determining whether a force majeure clause can be invoked is a fact-intensive inquiry, as it depends on the specific language of a contract which the parties have entered into. Generally, force majeure clauses are interpreted narrowly. .Force majeure clauses are interpreted in light of their purpose, which is “to limit damages in a case where the reasonable expectation of the parties and the performance of the contract have been frustrated by circumstances beyond the control of the parties involved or entered into a contract

Courtesy/By: Priyanka Bhattacharyya | 2020-06-27 00:57