Force Majeure clause

Force Majeure clause

·         Literary meaning is "Irresistible (uncontrollable) force"  

·         Force Majeure means "unforeseeable circumstances that prevent someone from fulfilling a contract".  That is unforeseeable course of events excusing from the fulfillment of contract by the contractor/supplier.

·         Object :  To protect the contractor/supplier from such  a liability arising from circumstances beyond his control.

·         The so called circumstances are acts of God such as wars or revolutions, hostility, acts of public enemy, civil commotion, sabotage, fires, floods, explosion, epidemics, quarantine restrictions, strikes, lock outs and freight embargoes etc.

·         By virtue of Force Majeure clause, the Contractor/supplier does not become liable to pay LD - Liquidated Damages, rather shall have extension of the time of delivery.  Because the circumstances/events which forced to prevent the supplier from supplying the stores are beyond his control.

·         Such situations - The supplier shall notify the Purchaser i.e., Indian Railways within21 days and  30 days for Stores contracts and Works contracts respectively from commencement  thereof with reasonable evidence thereof.

·         Such cases - Either party shall have the option to terminate the contract on expiry of 60 days and 120 days for Stores contracts and Works contracts respectively of commencement of such force majeure without financial repercussion on either side.

·         Action on this clause is equally can be taken by the purchaser i.e., Indian Railways, if Force Majeure situation affecting the Railways.