Natural Calamity Clause In Agreement

Subject to the provisions of paragraph 1.1 above, force majeure events include: Energy Watchdog and Golds. v/s Central Electricity Regulatory Commission and Ors.it was determined that the base of the contract was not terminated and was not a frustrating event, with the exception of higher coal prices. There were alternative service providers, albeit at a higher price. This does not frustrate the treaty as a whole. If the basis of the contract remains unchanged, an unexpected price increase does not exempt the part of the performance of its part of the contract, as it knowingly takes such a risk when the contract is concluded. Force majeure clauses must be interpreted strictly and a simple price increase, which increases the performance of the contract, is not a case of force majeure. As a result of the central government`s continued blockade to stem the spread of the new coronavirus (COVID-19) pandemic, all industries in India and around the world are being hit hard. Not only is the MSME faced with the main burden of the current situation, but large companies also have difficulties in managing their day-to-day affairs, will have no choice but to seek protection under the force majeure clause. 56. Agreement, impossible to act – An agreement to do an act that is in itself impossible is non-ae. The force majeure clause cannot be invoked in the following circumstances: for certain contracts/agreements, the force majeure clause z.B. is quite extensive and covers in detail the circumstances in which the exact state of the clause can be invoked. In this regard, general terms such as the epidemic, government military action, national or regional emergencies are generally used.

Using these terms, the invocation of the force majeure clause will be subject to specific situations, as noted above. Following the global coronavirus outbreak, the Ministry of Finance and the Indian government stated in their February 19, 2020 communication that the spread of coronavirus in China or another country will fall under the Force Majeure (FMC) clause. In this regard, the Ministry stresses that the spread of coronavirus must be considered a natural disaster and that, if deemed appropriate, FMC can be invoked and properly procedureed. The concept of force majeure comes from French civil law and is a recognized standard in many legal systems that dered their legal systems from the Napoleonic code. In common law systems, such as those in the United States and the United Kingdom, force majeure clauses are acceptable, but must take more clear account of the events that would trigger the clause. Reading various Indian court decisions on this issue, it can be concluded that the courts have sparingly upheld the invocation of the case of force majeure. However, it may also be concluded that the parties may invoke a force majeure clause during this current blockade in India or around the world if the clause in the treaty contains these events or if they can apply the doctrine of frustration if the performance of contractual obligations cannot be met. However, if there are other forms of contractual obligations, the Force Majeure clause is not applicable and the parties must comply with the contract with other available modes.

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