Name-Dev Verma

Section- C
Subject- Theory and practice of contracts in India
Submitted to – Prof. Sakshat Bansal and Prof. Auroshika Deka
Topic – Force Majeure vs. Doctrine of Frustration in contract law

Force Majeure
The term "Act of God" or "Force Majeure" refers to an occurrence
under which a non-performing entity is excused or has frustrated the
deal, rendering success impossible or impractical. In this article, we'll
look at whether it's legal, what the consequences are, and how courts
might react if a non-performing party is sued for violation of contract.
A 'force majeure' event or effect is something that cannot be predicted
or regulated. It's a contractual provision that distributes the risk of
failure if performance appears improbable or unrealistic, particularly
as a result of an unforeseeable or uncontrollable case.
In the framework of treaties, the 'Force Majeure' clause exempts a
party from performing its statutory obligations in the event of a force
majeure event.
The term "force majeure" isn't described anywhere, but it comes from
the Indian Contract Act of 1872, which states that a contract is null
and void if it is contingent on the occurrence of an improbable event.
"Force Majeure" is regulated by the Indian Contract Act of 1872
(hereafter referred to as the "Contract Act"). When a contract
specifies "Force Majeure" situations, it is regulated by Chapter III,
which deals with contingent arrangements, and especially Section 32
— which is a term or duty that is only enforceable if an uncertain
possible condition (contingent) arises and pays for the consequences.
When a Force Majeure occurrence arises outside of the contract, it is
dealt with under Section 56 of the Contract Act, which provides that a
contract that becomes impossible or unlawful to execute as a
consequence of an intervening incident is void in statute after it has
been entered into.
The essence and extent of the force majeure clause can differ from
one situation to the next. Force Majeure is a legal term that relates to a
party's failure to carry out a contract due to situations outside their
control. As a consequence, Force Majeure acts as an exception or
precaution in the event of a contract breach.
Doctrine of frustration
In simple terms, frustration means "not fulfilled" or "defeated," and
it's a term that's commonly used in contracts and negotiations between
parties. When the target of the transaction(s) becomes unlikely or is
defeated, this word comes into effect.The contract and its provisions
bind the parties to fulfill their obligations, and in the event of a
violation, the violating party is responsible to sue the other party. As
an exception to this law, Section 56 of the Indian Contract Act of
1872 establishes the Frustration Doctrine. It specifically deals with
actions that cannot be done and releases the party from all contractual
responsibility if the party fails to fulfill his or her obligations due to
an unforeseen cause and the contract becomes invalid.In this case, the
rule "Les non cogit ad impossibilia" should be extended, which means
that the law cannot force a man to do what he is unable to do.
The following is a requirement that must be met in order for this
Doctrine to apply:
A legal contract must exist between the parties- Which is a necessary
prerequisite under which a valid contract must exist between the
parties adhering to the same's conditions.
There must be a part of the contract that has yet to be executed- This
Section will apply only if there is a part of the contract that has yet to
be performed by the party, and without its success, the contract's
intent will not be fully realized.
The contract has become difficult to execute- Third, one of the most
important conditions for Section 56 to apply is that the contract's
success has become impossible, and thus the contract has become
invalid.

Difference between 'Force Majeure' and doctrine of

frustration
 The theory of force majeure is often confused and overlapped
with the doctrine of contract dissatisfaction or failure to
perform. After a contract has been performed, whether
execution of an act becomes unlikely or unconstitutional, and
such impossibility is attributed to an occurrence that the group
conducting the act does not avert, the contract becomes
invalid or the contract becomes "frustrated."
As a result, dissatisfaction occurs when an act occurs outside
of the contract that prevents the contract's success from being
completed.
If contract fulfillment is difficult, it is usually concluded that
the contract has been broken. It was decided that the term
"impossible" was not limited to physical or literal inability.
While an act might not be theoretically impractical to carry
out, it seems to be pointless from the standpoint of the parties.
The law of contract discharge includes the principle of
contract disappointment, which arises from an accidental
impossibility or illegality of the agreed-upon act. Unlike the
Force Majeure provision, which is usually inserted into a
contract, a contract's frustration or inability to execute it is
ruled by statute under section 56 of the Contract Act. As a
result, if the contract does not include explicit or implicit
exemptions for non-performance owing to Force Majeure, a
party requesting a defense outside of the contract can depend
on section 56 of the Contract Act.
The fundamentals to claiming ‘Force Majeure'
Events must make contract execution unlikely – in order to count as
an event of Force Majeure dehors the contract, an event must totally
destroy the very foundation on which the parties negotiated. The
contract will be irritated if an incident or condition adjustment occurs
at the base of the contract. What remains to be examined is whether
the altered condition has absolutely destroyed the arrangement's base
and the item under it.
An accident must be unavoidable, and financial difficulties alone
cannot constitute Force Majeure – an increase in prices or spending
has been reported as not being sufficient to frustrate the deal.
The occurrence must be spontaneous, meaning it cannot be forecast or
anticipated using standard due diligence. The Force Majeure clause is
not activated by a forewarning of an imminent Force Majeure case.
The occurrence may have arisen not as a consequence of the party's
default, but rather as a result of a subsequent case. When an FM
occurrence does not preclude a party from meeting its commitments,
the FM clause cannot be invoked.
Many Force Majeure provisions stipulate that a non-performing entity
attempting to invoke the Force Majeure clause of the contract must
first notify the other party. Such terms are precedent conditions for
invocation; if a party fails to comply with these clauses, they will not
be able to invoke Force Majeure.
Duty to mitigate – A party relying on the Force Majeure clause shall
take all fair measures to mitigate the damage arising from its inability
to perform.
Conclusion
Force Majeure and the law of contract frustration have long been
recognized as extraordinary protections in cases of total impossibility.
Although the standard of evidence may remain strong, the courts will
determine the practicalities of the case in a more complex way.
However, it is better left to the parties to draft proper Force Majeure
provisions that contain incidents that prohibit them from working out
contracts. As a result, an increase in the amount of commercial
contracts including Force Majeure provisions is most probable – to
directly include cases like government-imposed lockdowns,
epidemics, and pandemics, in addition to typical incidents like
Actions of God, natural calamities, and so on.
The parties may invoke Section 56 of the Indian Contract Act, 1872,
which defines the doctrine of discontent in the absence of a force
majeure provision. To put the contract into effect, the parties must
show that the contract's implementation has been improbable and that
the contract's terms and conditions have significantly changed from
what was originally agreed upon. Price disparity provisions,
termination or breakup contracts, major adverse adjustment
conditions, and other clauses that alleviate liability for non-
performance or incomplete execution of contractual contracts may be
included by the parties. The right to argue certain grounds will be
based on the Contracts' wording, the adherence of case law to such
terms, and how courts, judges, and other adjudicators interpret those
clauses.
The Supreme Court of India has recognized that the contract's
conditions, their matrix or meaning, the parties' knowledge,
expectations, decisions, and preferences, especially with regard to
danger, at the time the contract was entered into, are all considerations
to be considered, to the degree that these can be ascribed collectively
and objectively.
There is a high bar for showing that a deal is unsatisfactory. It is
critical to be as proactive and careful as possible at the outset in order
to avoid this danger.
References

1. J. A. C. K. (2020, April 1). Force Majeure vs. Frustration of Contracts in the Time of

COVID-19. Www.Lawsonlundell.Com. https://www.lawsonlundell.com/china-

blog/force-majeure-vs-frustration-of-contracts

2. FORCE MAJEURE versus DOCTRINE OF FRUSTRATION – Vidhisastras. (2020,

August 12). Https://Vidhisastras.Com. https://vidhisastras.com/force-majeure-versus-

doctrine-of-frustration/

3. Doctrine of Frustration and Force-Majeure Clause. (n.d.).

Www.Legalserviceindia.Com. http://www.legalserviceindia.com/article/l289-

Doctrine-of-Frustration-&-Force-Majeure-Clause.html

4. Sehgal, D. R. (2020, September 9). Understanding force majeure and the doctrine of

frustration under Indian contract law. IPleaders.

https://blog.ipleaders.in/understanding-force-majeure-doctrine-frustration-indian-

contract-law/

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