STUDY NOTES
Force Majeure — Origin, Statutory Basis, Scope, and Case Law
A. ORIGIN AND MEANING
• The term 'force majeure' (literally 'superior force') is a civil law concept, originating in the French
Civil Code (Code Napoléon, 1804), Article 1148 (now Article 1218 after the 2016 French contract
law reform). Civil law systems (France, and by extension many jurisdictions influenced by it)
recognise force majeure as a general, codified excuse from contractual liability where performance
is prevented by an event beyond the parties' control, which was unforeseeable and irresistible.
• Common law systems (England, and India as a common law jurisdiction) historically had no free-
standing doctrine of force majeure. Instead, English law developed the doctrine of frustration
through case law, beginning with Taylor v. Caldwell (1863), under which a contract is discharged if
an unforeseen event, without fault of either party, renders performance impossible or radically
different from what was undertaken.
• Because common law has no automatic statutory force majeure protection, force majeure in India
and England operates primarily as a matter of contract — parties draft their own force majeure
clauses defining covered events, notice requirements, and consequences. Absent such a clause,
parties must fall back on the narrower statutory/judicial doctrine of frustration.
A.1 Force Majeure vs Frustration — the key structural distinction
• Force majeure (contractual): a clause specifically negotiated and drafted into the contract, listing
covered events and consequences (suspension, extension of time, termination) — operates
according to its own terms.
• Frustration (statutory/common law): applies only in the absence of a force majeure clause, or where
the clause does not cover the event in question; in India, governed by Section 56, Indian Contract
Act, 1872, and results in the contract becoming void, not merely suspended.
• Energy Watchdog v. CERC (2017) settled that where a contract has its own force majeure clause,
Section 56 has no application at all — the clause is treated as the complete, exhaustive code
between the parties for that contingency.
B. STATUTORY PROVISIONS IN INDIA
B.1 Indian Contract Act, 1872
• Section 32 (Contingent contracts): a contract contingent on the happening of an uncertain future
event becomes void if that event becomes impossible.
• Section 56 (Agreement to do impossible act): an agreement to do an act impossible in itself is void.
A contract to do an act which, after the contract is made, becomes impossible, or, by reason of
some event the promisor could not prevent, unlawful, becomes void when the act becomes
impossible or unlawful. This is the statutory home of the 'doctrine of frustration' in India.
• Satyabrata Ghose v. Mugneeram Bangur & Co. (1954) clarified that Section 56 is exhaustive on this
subject in India; 'impossibility' is read to include practical/commercial impossibility, not only literal
physical impossibility, but mere hardship or increased expense is not enough (reaffirmed in Alopi
Parshad and Naihati Jute Mills).
B.2 Other statutory/regulatory instruments
• General Financial Rules, 2017, Rule 175(3) — model force majeure clause for government supply
contracts; invoked government-wide for COVID-19 vide Ministry of Finance Office Memorandum
dated 19.02.2020, treating the pandemic disruption as a natural calamity for this purpose.
• Real Estate (Regulation and Development) Act, 2016, Section 6 — allows extension of project
registration on account of force majeure, narrowly defined to mean war, flood, drought, fire,
cyclone, earthquake, or other calamity caused by nature affecting the project's regular development.
• Industrial Disputes Act, 1947, Section 2(kkk) — defines 'lay-off' to include an employer's inability
to provide employment due to a natural calamity, functioning as a statutory force-majeure-like
mechanism in labour law, distinct from contract law.
• Sale of Goods Act, 1930, Sections 7, 8, and 26 — deal with goods perishing before sale/before risk
passes, which operate similarly to force majeure in specific-goods sale contracts, though framed as
rules on risk and impossibility rather than as a force majeure doctrine per se.
C. IS 'FORCE MAJEURE' A SYNONYM FOR 'ACT OF GOD'?
No — 'Act of God' (vis major) is a narrower subset of force majeure, not a synonym for it. The distinction
matters both in scope and in the branch of law where each concept is chiefly used.
Aspect Act of God Force Majeure
Scope Confined to natural events with no Broader — includes Act of God events
human intervention or fault AND human-caused events: war,
Aspect Act of God Force Majeure
(earthquake, lightning, storm, flood terrorism, strikes, riots, government
arising purely from natural causes). action/regulatory change, epidemics,
embargoes.
Primary field of use Chiefly a defence in the law of Chiefly a contract-law concept — either
torts/strict liability (e.g., as an as an express clause or, in its absence,
exception to the rule in Rylands v. channelled through the statutory doctrine
Fletcher), and occasionally in of frustration under Section 56.
contract/insurance.
Origin Common law tort doctrine. Civil law contractual doctrine (French
Civil Code), imported into common law
jurisdictions mainly through negotiated
contract clauses.
Relationship Act of God is one specific category of Force majeure is the umbrella term; Act
event that force majeure clauses of God is one (natural) sub-category
typically list. within it.
D. WHERE FORCE MAJEURE CAN BE INVOKED — BEYOND
ORDINARY COMMERCIAL CONTRACTS
Sector/Contract Type How Force Majeure Operates
Government procurement & Rule 175(3), General Financial Rules, 2017 contains a model force majeure
works contracts clause for supply contracts; Ministry of Finance O.M. dated 19.02.2020
treated COVID-19 disruption as a 'natural calamity' force majeure event for
invoking this clause.
Construction / EPC / infrastructure FIDIC-style and domestic EPC contracts contain detailed force majeure
contracts clauses allowing extension of time (EOT) and sometimes cost
compensation; distinguished from mere delay due to contractor's own
default.
Real estate (RERA) Section 6, Real Estate (Regulation and Development) Act, 2016 allows
extension of project registration on account of force majeure, defined
narrowly therein as war, flood, drought, fire, cyclone, earthquake, or other
calamity caused by nature.
Lease and rent agreements No general statutory force majeure protection for tenants; relief depends
entirely on an express clause in the lease deed (see Ramanand v. Girish
Soni).
Insurance contracts Force majeure/Act of God perils are typically either covered as insured
perils or excluded, depending on policy wording; the concept operates
through policy interpretation rather than a general contract-law doctrine.
Employment / industrial relations Section 2(kkk), Industrial Disputes Act, 1947 defines 'lay-off' to include
inability to give employment due to a natural calamity or 'any other
connected reason' — a statutory (not contractual) force majeure-like
mechanism.
International trade / shipping / Concepts of 'restraint of princes', frustration of the commercial adventure,
Sector/Contract Type How Force Majeure Operates
charterparties and force majeure clauses in charterparties/CIF-FOB contracts; export
bodies (e.g., DGFT-recognised chambers of commerce) issue force majeure
certificates for exporters unable to meet shipment deadlines.
Loan and financial contracts Usually addressed through separate regulatory relief (e.g., RBI COVID-19
moratorium circulars) rather than contractual force majeure clauses, though
loan agreements may contain their own MAC (material adverse change) or
force majeure provisions.
E. CASE LAW GUIDELINES
Case Citation Proposition
Taylor v. Caldwell (1863) 3 B&S 826 Foundational case for the English doctrine of frustration
(English) — a music hall destroyed by fire before a scheduled event
discharged the contract; impossibility of performance
without fault of either party excuses performance.
Satyabrata Ghose v. AIR 1954 SC 44 Leading Indian authority: Section 56, Contract Act is
Mugneeram Bangur & Co. exhaustive on frustration in India; English cases are only
of persuasive value. 'Impossibility' under Section 56
means practical/commercial impossibility, not necessarily
literal physical impossibility.
Alopi Parshad & Sons Ltd. v. AIR 1960 SC 588 Courts cannot rewrite or excuse a contract merely because
Union of India performance became more onerous or expensive than
contemplated; frustration requires a fundamentally
different obligation, not just a costlier one.
Naihati Jute Mills Ltd. v. AIR 1968 SC 522 Mere hardship, commercial difficulty, or increased cost of
Khyaliram Jagannath performance does not amount to frustration or force
majeure.
Energy Watchdog v. CERC (2017) 14 SCC 80 Where the contract itself contains a force majeure clause,
Section 56 (frustration) has no application — the clause is
the exhaustive code between the parties and must be
construed on its own terms; a mere rise in input costs
(coal) is not force majeure.
Halliburton Offshore Services 2020 SCC OnLine COVID-19 lockdown accepted, prima facie, as a force
Inc. v. Vedanta Ltd. Del 542 majeure event for delayed performance; interim
injunction granted restraining invocation of bank
guarantees pending resolution of the force majeure
dispute.
Ramanand v. Girish Soni 2020 SCC OnLine In the absence of a specific force majeure/rent-waiver
Del 1214 clause in a lease, force majeure/frustration under Section
56 does not automatically suspend or waive the tenant's
obligation to pay rent; tenant may seek other equitable
remedies but not a blanket exemption.
Standard Retail Pvt. Ltd. v. 2020 SCC OnLine Force majeure excuses a performance obligation (e.g.,
G.S. Global Corp. Bom 704 supply/delivery); it does not excuse a pure payment
Case Citation Proposition
obligation for goods already delivered and accepted.
F. KEY DRAFTING AND EXAM TAKEAWAYS
• Force majeure is not synonymous with Act of God; Act of God is one category within the broader
concept of force majeure.
• Where a contract has its own force majeure clause, that clause displaces Section 56 entirely (Energy
Watchdog) — so the drafting of the clause itself (list of events, notice requirements, consequences)
becomes decisive litigation material.
• Courts consistently refuse to treat mere increased cost, hardship, or commercial difficulty as force
majeure or frustration (Alopi Parshad; Naihati Jute Mills) — genuine impossibility or a radically
different obligation is required.
• Force majeure excuses performance obligations; it does not, without specific wording, excuse
independent payment obligations for performance already rendered (Standard Retail v. G.S. Global
Corp.).
• Sector-specific statutory force majeure mechanisms exist outside ordinary contract law — RERA
project extensions, government procurement rules, and industrial lay-off provisions each have their
own definitions and procedures, distinct from Section 56 and from privately negotiated clauses.