The Effect of Outbreak of COVID-19 on Force Majeure Clause in Commercial Contracts: An Indian Perspective

The recent outbreak of COVID-19 has a devastating impact on mankind and countries globally, its outreach has also affected the trade, business and commerce of the nations. The rapid spread of the pandemic has made the Governments take eminent and vital steps to save the community along with saving the economy of the country. Amidst such policies, India took a decisive move of complete lockdown of the country which has led to disruption and closure of industries and businesses. Consequently, it has impacted the performance of contracts and obligations entered by the parties. This has endeavored to demystify the concept of Force Majeure in the commercial contracts. The current Research Paper analyses the applicability of ‘Force majeure’ clause incorporated in commercial contracts during the current pandemic outbreak of COVID-19. It further evaluates the contracts which do not have such clause and the consequences on the business transactions thereof. Lastly, the extent of limitation period of a contract is also critically analyzed.
Keywords: Contracts, Force Majeure, COVID-19, Limitation period