Force Majeure A measure to mitigate risk

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Force Majeure A measure to mitigate risk

Date \| Version	September 25, 2022 \| 1.0
Keywords	Force Majeure, Act of God, Affected Party, Force Majeure Clause, Force Majeure Event
Jurisdiction	India

Introduction

There are unavoidable circumstances where, despite best intentions, a contracting party is unable to perform its obligations in the manner contractually agreed. To mitigate liability arising from such failure, parties commonly include a Force Majeure (FM) provision within their contracts.

A Force Majeure clause excuses the affected party from performing its contractual obligations to the extent that such performance is impacted by specified events beyond its reasonable control, whether arising from an Act of God or other extraordinary circumstances.

While the concept appears straightforward, an inadequately drafted Force Majeure clause can expose parties to unexpected liabilities arising from non-performance. Therefore, careful drafting is essential to ensure that risks intended to be mitigated are effectively addressed.

The article examines the fundamental aspects of Force Majeure provisions, including what events qualify as Force Majeure, when such events may be relied upon, how the process should operate, and the legal consequences arising from Force Majeure events. It further provides drafting guidance, practical considerations, and a sample Force Majeure clause for contractual use.

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Force Majeure A measure to mitigate risk

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