GEM Engserv Pvt. Ltd is an ISO 9001:2015 certified organization, certified by TUV India in accreditation with National Accreditation Board for Certification Bodies (NABCB).

FORCE MAJEURE: Identification, Obligations, Continuation, End

Jagdish Raje - Director

Force Majeure

There are instances in the course of a construction contract when the entire work or a part of it or any other contractual obligation cannot be performed. The reasons for such inability to fulfill such an obligation may be attributable to the client or the contractor or to both. There are situations where such a situation has to be affected due to the reasons not attributable to any party. The inability to meet the contractual obligations due to such reasons can be broadly called as Force Majeure.

Force Majeure is a very common term found in contracts. It literally means Superior Force. In practice it means a chance occurrence or an unavoidable accident.

To establish the existence of Force Majeure, the following criteria have to be applied.

  • Such an event must be beyond the control of the affected party AND
  • The affected party could not have REASONABLY provided for the occurrence of such an event in their contractual obligation AND
  • Having arisen, the event or its effects cannot be overcome AND
  • The event should not have been caused by or be attributable to the other part

It must be noted that the event that has caused the Force Majeure should satisfy all of the four criterion above simultaneously.

It is the obligation of the affected party to inform the other party of the existence of the Force Majeure as soon as possible. In case the existence of Force Majeure is established then the affected party is excused from performing those obligations that are directly affected by the Force Majeure. 

For example, a government ban on all construction activities in an area is a force majeure and the contractor, as the affected party shall be excused from performing any construction activity such as concreting, masonry, plastering, flooring etc. In this case, there is a Catch 22 situation with respect to concrete curing with water. If it is considered as construction activity, then it should also be suspended and it’s adverse effects be borne. This may hurt the Client more than the Contractor. If curing is kept out of the ambit of construction and put under the maintenance of the constructed facility (which is generally a contractual obligation of the Contractor) then the curing can continue but the contractor cannot be made to do it on a regular basis. Another solution would be to insist on chemical curing in such situations but the client must be ready to compensate the contractor for the additional cost of the chemical compound and the effort of spraying the same.

The duration for which the Force Majeure exists, the time period is extended for that period. Here the moot question is if the affected activities are not on the critical path, then would the Contractor be entitled to extension of the entire duration of Force Majeure?  

In India, the law appears not to have taken cognizance of the CPM scheduling. Therefore the rulings have generally granted the extension of time regardless whether the affected activities lie on the critical path or otherwise.

Normally, when a contractor informs of Force Majeure the Client is entitled to accept or reject it applying the tests mentioned above. In case the Client does not accept an event to be a Force Majeure then the Contractor has to perform his obligations. The Contractor may seek an extension or compensation in any other form through the dispute resolution process.

The Client in any case cannot suspend payments of monies due unless the Force Majeure event is such that it encompasses the activity of payment such as a general mass strike or an act of God like flood, earthquake etc.

The Force Majeure comes to an end when the event that has caused cease to exist or the effect of that event has been negated.

The Client also cannot terminate the contract due to Force Majeure. In case the Force Majeure prolongs for a long period, both parties have an option to terminate the contract by consent.

Notify of
Inline Feedbacks
View all comments

Liked Reading this Article? Check out below some more similar content..

​This article discusses Mediation in Construction contracts. All big and small construction industry projects are highly technical, sensitive and people oriented. This article introduces mediation as a dispute resolution method in the industry. This article will cover in brief about mediation and its relevance and importance to the construction industry.
MSMEs not only drive growth but also sustain the people whose aspirations take the economy to the next level. Then why is this segment so overlooked? Read on to explore.
Understand how the effective contracts administration and management safeguards interests of all stakeholders.
Understand the Force Majeure situation and the sudden importance of the Force Majeure clause in Construction projects and Contracts in the COVID-19 scenario.
Understand types of risks related to construction of the project and mitigating measures through a written contract.
Read more about our perspective on scope of lump sum contract in real estate sector, advantages and disadvantages of lump sum contract and it's impact on contractor.
Would love your thoughts, please comment.x