Force Majeure clause
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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.