What is the meaning of ” Force Majeure “

“Force Majeure”, Yes, the widely known term but also the lesser understand term, when this term comes to play, everything else just suspends. Since, the motto of this platform is “Complex to Simple”; here is the simple meaning of force majeure; Circumstances beyond one’s control, one understood there is no harm touching the core.

Defined structure of Contracts and Agreements

When we talk about force majeure we are talking about contracts, deeds, and agreements of any nature. Contracts, deeds, and agreements are drafted in such a way that they include all the important clauses in a systematic way while keeping in consideration all impending legal obligations and repercussions. Besides the introduction of the parties to the contract along with their principal place of business, the purpose of the contract unfolds itself in the form of Recitals or in simple language statement of introduction. In these Recitals, along with the commercial background of the Parties, there is a mention of the purpose of entering into the contract. After that, the important clauses like Term and effective date of the contract, roles and responsibilities of the parties under contract, obligations of the parties, consideration and mode of payments, Indemnification, liability and its limitations, warranties and representations of the parties instances of default, remedies to cure the contracts, instances that can lead to the termination of the clause are mentioned.

Here lies Force Majeure

Force majeure generally forms the part of general clause of the contract along with other general clauses like severability, non- waiver of rights, modification, Dispute resolutions and Governing Law, Arbitration clause (optional), non- assignment, entire agreement and notices.
Though Force majeure generally forms the part of general clause but when this clause comes in play, its effect is so strong that it can make the contract redundant.

The Big Question?
Question that arises is that that when this clause can be invoked, are there are some parameters under which the parties can invoke Force majeure as the reason of non-performance of contractual obligations?

The Simple Answer:
Here is the simple answer, self-creating troubles and self-interpretations to any exigency cannot dragged in to the scope of this emergency clause of Force majeure, like any other emergency this emergency to have its protocols which is to be followed in strict sense. Here are some of the circumstances in which this emergency clause can invoked and that too under certain specific situations like as follows;

• • war (whether declared or not), hostilities, invasion, act of foreign enemies, extensive military mobilisation;
  • civil war, riot, rebellion and revolution, military or usurped power, insurrection, act of terrorism, sabotage or piracy;
  • currency and trade restriction, embargo, sanction;
  • act of authority whether lawful or unlawful, compliance with any law or governmental order, expropriation, seizure of works, requisition, nationalisation;
  • plague, epidemic, natural disaster or extreme natural event;
  • explosion, fire, destruction of equipment, prolonged break-down of transport, telecommunication, information system or energy;
  • general labour disturbance such as boycott, strike and lock-out, go-slow, occupation of factories and premises

Passing the test of exigency

Simply invoking the clause does not help, even during the existence of the one of the hardships or emergency situations mentioned above, the affected party has to prove that

1. 1. that the such situations are beyond its reasonable control;
   2. that the occurrence of the situations could not be foreseen at the time of entering of the contract;
   3. that the effects of the situations could not have been avoided by the affected party.

So, though Force majeure usually finds place in the general clauses of the contract, but in order to invoke the clause, the affected party has to establish and cause and effect relationship between the instance of Force majeure and its effect on the affected party.

Touching the Core
Now another question arises, how Courts are interpreting this clause. The Courts are interpreting this clause only on the basis of how the clause has been drafted. Thus it is very important to specify the types of circumstances that you anticipate could prevent you to perform your contractual obligations.

Besides the specific mention of the impediments and circumstances that can prevent to affected party to contract to perform its contractual obligation, it is also important the type of language we are using before and after the list of force majeure events e.g., adding words like “any other emergency situations beyond the control of the parties” would narrow down the definition of force majeure to the emergencies only and again emergency is a generic word. So we need to be very careful in the drafting of the force majeure clause in the contract.

Though the Force majeure is a silent clause of any commercial contract, but the situations like terrorists attacks, floods, tsunamis, forest fires, earthquakes and the present situation of COVID-19 has thrown challenging situations before businesses i.e., the interpretation of Force Majeure clause in the contracts and its legal implications. Brief discussion above must have given you some insight into this most generic but at the same time most powerful clause of any contract which can hit at the very life of the contract.