What is a Force Majeure?
Force Majeure (meaning 'superior force') is a clause that frees both parties from liability or obligation when an extraordinary event or circumstance beyond their control occurs.
Deep Dive: The Force Majeure
Hidden Risks for Founders
Many Force Majeure clauses exclude specific events (like economic downturns). Additionally, some clauses only allow one party to declare it, not both. If your client can suspend payment during a crisis but you still have to deliver, you have a major risk on your hands.
Example in a Contract
Legal Enforceability in India
Enforceable under Section 56 of the Indian Contract Act (Doctrine of Frustration). However, if an event is explicitly listed in the contract, it is treated as a contractual right rather than an implied frustration.
When Does Force Majeure Apply in India?
Under Indian law, force majeure operates through two distinct mechanisms: (1) a contractual clause explicitly listing events, and (2) the Doctrine of Frustration under Section 56 of the Indian Contract Act, 1872. Courts treat these very differently. A contractual force majeure clause is interpreted strictly — if the event is not listed, it does not qualify. The Doctrine of Frustration under Section 56 applies only when performance becomes legally or physically impossible, not merely commercially inconvenient.
Post-COVID, the Supreme Court of India clarified in Energy Watchdog v. CERC (2017) and subsequent cases that economic hardship alone does not trigger force majeure. The event must make performance objectively impossible, not just more expensive or difficult.
Common Events Covered by Force Majeure Clauses
Critical drafting note: Always include a specific list of qualifying events rather than using catch-all language alone. Indian courts read catch-all phrases restrictively — only events of the same type (ejusdem generis) as those specifically listed will qualify.
Steps to Invoke Force Majeure Correctly
- Issue written notice immediately. Most force majeure clauses require notice within 7–30 days of the triggering event. Missing this deadline can waive your right to invoke the clause.
- Document the event thoroughly. Government orders, news reports, and official communications are essential evidence. Courts require proof that the specific event occurred and directly caused the inability to perform.
- Demonstrate impossibility, not inconvenience. The affected party must show that performance was objectively impossible — not just more expensive or logistically harder.
- Continue obligations that are not affected. Force majeure typically suspends (not terminates) the contract. Obligations unaffected by the event must continue. Payment obligations are rarely excused.
- Attempt mitigation. Courts and contract law require the affected party to take all reasonable steps to minimize the impact of the force majeure event and resume performance as soon as possible.
Force Majeure vs. Section 56 Frustration: Key Differences
| Aspect | Force Majeure Clause | Section 56 Frustration |
|---|---|---|
| Source | Contractual clause | Statutory doctrine |
| Requires explicit contract term? | Yes | No — implied by law |
| Effect on contract | Suspends obligations | Voids the contract |
| Standard required | As defined in clause | Impossibility, not difficulty |