Force Majeure Clause within Contract

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Force majeure clause is the clause that sets parties of the contract free from all the obligations which they are required to perform under the contract. It basically provides alternative relief upon the occurrence of force majeure events and also provides the opportunity to alter or renegotiate the terms of the contract. While the doctrine of frustration means if performance becomes impossible or unlawful to perform when the contract becomes void as one cannot perform something which is impossible. But if there is no force majeure clause in the contract then Section 56 of the Indian contract Act 1872 will apply.

 

Satyabrata Ghose v. Mugneeram Bangur, the Supreme Court held that the impossibility of the performance of a contract does not mean performance of the contract becomes impossible but it means the performance becomes impractical for the object and purpose which is the foundation of the contract is destroyed due to any event or circumstances. In Alopi Prashad and Sons Ltd v. Union of India (1960), the court held that doctrine of frustration is not applied in cases where the circumstance under which the contract was made gets altered.

 

Tsakiroglou and Co. Ltd v. Nobler thoro gmbti (1961) it was held in this Landmark case that if the contract can be performed in any different way or manner rather than what was mentioned in the contract due to any event or circumstances then it does not amount to the frustration of contract. As in this case, the ship was not able to use the mentioned route to transport goods so they were required to take the longer route and were also more expensive. So it does not mean this amounts to the frustration of the contract. In Coastal Andhra Power Ltd. v. Andhra Pradesh Central Power Distribution Co. Ltd. (2019), the court held that if there is an increase in the cost due to the performance of contract or change in law then it is not forced Majeure events. As well as in Boothalinga Agencies v. VTC(1969), the court held that doctrine of frustration won't be applied under Section 56 of this act if it arises from the election or any act.

 

 

 

 

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