Force Majeure Clause in Commercial Contracts – Post-Pandemic Guide
- Legal Amenity
- Jul 5
- 4 min read
Introduction
The COVID-19 pandemic shook the very foundation of global business operations, prompting legal professionals and businesses to rethink risk allocation in commercial contracts. One clause that surged to the forefront during this crisis is the Force Majeure clause. Once overlooked or hastily drafted, it is now considered a vital shield against unforeseen events that can disrupt contractual obligations.
In the post-pandemic legal landscape, Force Majeure clauses are no longer just boilerplate—they are strategic risk management tools. In this blog, we unpack the evolving role of Force Majeure in modern contract drafting, explore its legal interpretation in India, and provide insights on how to future-proof your contracts.
What Is Force Majeure?
Force Majeure (a French term meaning "superior force") refers to an unforeseeable event that prevents a party from fulfilling their contractual obligations. These events are typically beyond the control of the parties and may include:
Natural disasters (earthquakes, floods)
Wars and civil unrest
Government actions or legal restrictions
Epidemics or pandemics
Strikes and labor disruptions
It is not automatically implied in all contracts under Indian law. Parties must expressly include a Force Majeure clause to invoke its protection
Why Force Majeure Matters More Than Ever Post-COVID
During the pandemic, businesses faced lockdowns, supply chain disruptions, and government-imposed restrictions. Many turned to their Force Majeure clauses, only to find them either missing or too vague to provide relief. Courts across jurisdictions had to evaluate whether COVID-19 qualified as a Force Majeure event—and the answers varied.
Key Issues Faced During the Pandemic:
Contracts lacked pandemic-related language.
Force Majeure clauses didn’t cover government lockdowns.
Some clauses required strict notice periods that weren’t met.
Parties failed to show causal connection between the event and non-performance.
Lesson Learned:
Force Majeure clauses must be detailed, specific, and scenario-based. They should evolve with the changing global environment and include terms like “pandemics,” “epidemics,” “government shutdowns,” and “public health emergencies.”
Legal Perspective: Force Majeure in Indian Contract Law
Under Section 32 of the Indian Contract Act, 1872, if a contract is contingent upon the happening of an event and such event becomes impossible, the contract becomes void.
If there is no Force Majeure clause, Section 56 (Doctrine of Frustration) may apply, which discharges the contract if the performance becomes impossible due to an unforeseeable event.
However, courts are strict. They assess:
Was the event truly unforeseeable?
Was performance completely impossible or merely more difficult?
Did the party take reasonable steps to mitigate the impact?
Case Reference: Energy Watchdog v. CERC (2017) – The Supreme Court clarified that economic hardship is not Force Majeure unless specifically mentioned in the contract.
Essential Elements of a Modern Force Majeure Clause
To ensure enforceability and relevance, a Force Majeure clause in the post-pandemic world should include the following elements:
1. Definition of Force Majeure Events
Include a comprehensive, illustrative list: “...including but not limited to pandemics, epidemics, government-imposed lockdowns, travel bans, natural disasters, war, terrorism, cyberattacks, or other similar events beyond the party’s control.”
2. Causal Link Requirement
The clause must require that the Force Majeure event directly prevents performance—not just makes it inconvenient.
3. Notice Obligation
Specify the timeframe and mode for giving notice: “Party must notify within 7 days of becoming aware of the Force Majeure event.”
4. Obligation to Mitigate
Include a duty to take reasonable efforts to continue performance or minimize the delay.
5. Suspension vs. Termination
Clarify whether obligations are suspended for a period or terminated entirely if the Force Majeure persists beyond a specific timeframe.
Best Practices for Drafting Force Majeure Clauses in 2025 and Beyond
Be Specific, Not Generic List potential disruptions relevant to your industry (e.g., cyberattacks for IT, export bans for manufacturing).
Tailor to Jurisdictional Law Account for the legal interpretation in the governing law country. Indian courts, for instance, expect clear language and strong evidence of impossibility.
Include a Catch-All Provision End the list of events with: “or any other event beyond the reasonable control of the party.”
Use Tiered Remedies Set time-based responses: suspension for 30 days, renegotiation after 60 days, and right to terminate after 90 days.
Coordinate with Other Clauses
Ensure consistency with the termination clause, dispute resolution, and liquidated damages provisions.
Force Majeure vs. Hardship Clause – Know the Difference
Force Majeure: Excuses performance if it becomes impossible.
Hardship Clause: Triggers renegotiation if performance becomes excessively burdensome, but not impossible.
In volatile sectors, consider including both clauses for layered protection.
Conclusion
The Force Majeure clause is no longer a passive legal formality. It is a dynamic tool for navigating uncertainty in a world of climate change, geopolitical tensions, and global health threats. In the post-pandemic business environment, having a robust, well-drafted Force Majeure clause is not just a legal necessity—it’s a strategic advantage.
Whether you're a business owner, in-house counsel, or contract manager, now is the time to review, revise, and future-proof your contracts.
FAQ
Q1. Is COVID-19 considered a Force Majeure event in contracts?
Yes, but only if the clause specifically includes pandemics or government lockdowns. Courts require clear language and proof that performance was impossible due to the event.
Q2. Can a party terminate a contract immediately by invoking Force Majeure?
Not always. Most clauses require notice, proof of impact, and a waiting period before termination is allowed.
Q3. Is Force Majeure implied under Indian law?
No, Force Majeure must be expressly included in the contract. Otherwise, the doctrine of frustration under Section 56 may apply.
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