Force Majeure Clauses in India: What They Cover and What They Do Not

A force majeure clause lets a party pause, or sometimes walk away from, its contract obligations when an event outside anyone's control makes performance impossible, or genuinely impracticable, such as a war, a natural disaster, a government lockdown, or a change in law. The one thing most people get wrong: they treat force majeure and the general law of "frustration" as two versions of the same escape hatch, so if the clause does not quite cover their situation, they assume Section 56 of the Indian Contract Act will simply step in and rescue them. It usually will not. Once your contract has an express force majeure clause, Indian courts read that clause, not Section 56, as governing the field. This guide (published by Adira, which makes contract review and CLM software, so we have a commercial stake in you understanding clauses like this, but the explainer stands on its own) walks through what the clause actually does, what the Supreme Court has said about when it applies, and what to check before you sign or invoke one.

Plain meaning

A force majeure clause is a risk-allocation mechanism, not a general "get out of jail free" card. It has three parts. First, a list of qualifying events, wars, floods, earthquakes, epidemics, strikes, government orders, usually with a catch-all for events beyond reasonable control. Second, a process: notify the other party within a stated window, describe the event's impact, and take reasonable steps to mitigate it. Third, an effect, usually suspension of the affected obligations for as long as the event lasts, sometimes escalating to a right to terminate if it drags on past a stated "long-stop" period.

What the clause is not is a route out of a contract that has simply become expensive or inconvenient. Indian contract law is unusually strict here: a rise in cost, even a steep one, is ordinary commercial risk that a party agreed to bear when it signed a fixed-price deal. The clause exists to cover the event nobody priced in, not the event that made a good deal worse.

Who it protects and what triggers it

Force majeure clauses are usually mutual on paper, but in practice they protect whichever party's performance is more exposed to physical or regulatory disruption: the manufacturer whose factory floods, the vendor whose data centre loses power in a declared emergency. The trigger is never "any difficulty." It is a defined event that (a) is beyond the invoking party's reasonable control, (b) could not have been avoided by reasonable diligence, and (c) actually prevents or materially delays the specific obligation, not just makes it costlier. This causal link is where most claims fail: a party must show the event is the reason it cannot perform, not that the event happened in the background while its costs also rose.

What to look for

Five mechanics decide whether a force majeure clause actually works when you need it:

1. Closed list, or a genuine catch-all? A closed list ("war, flood, earthquake") without a residual "or any other event beyond the reasonable control of the party" phrase can leave a real disruption, like a pandemic never named, outside the clause entirely.
2. Notice deadline, and the consequence of missing it. Many clauses say the right to claim force majeure is lost, or the excused period only starts from the notice date, if you do not notify within a stated window, commonly 3 to 15 days.
3. A mitigation duty. A well-drafted clause requires the affected party to use reasonable efforts to perform around the event before relying on force majeure for that obligation.
4. Suspension distinct from termination. Most clauses suspend obligations first. Termination should require the event to continue past a long-stop period, commonly 30 to 90 days, not be available from day one.
5. Payment carved out. A common, reasonable choice is to exclude money already due from the excuse, so a disruption does not become a reason to withhold payment for work already delivered.

The Indian position: Section 32 governs where a clause exists; Section 56 only fills the gap

This is the part of Indian law that surprises most people. Section 32 of the Indian Contract Act, 1872 governs contingent contracts, and an express force majeure clause makes the contract's continued performance contingent on the listed events not occurring:

"Contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void." Source: Section 32, Indian Contract Act, 1872

Section 56 is the separate doctrine of frustration, sometimes called subsequent impossibility. It reads:

"An agreement to do an act impossible in itself is void. A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise." Source: Section 56, Indian Contract Act, 1872

Here is the point most contract guides get wrong: these two sections do not stack. If your contract has an express force majeure clause that covers the field, that clause is governed by Section 32, and Section 56 has no role to play, even if the clause does not quite get you the outcome you wanted. Section 56 fills the gap only where the contract is silent, where there is no applicable force majeure clause to begin with. If your clause does not list the event you are facing, and has no working catch-all, you cannot reach past it into Section 56 and hope for a better result. The Supreme Court settled this directly.

The named case: Energy Watchdog v CERC

In Energy Watchdog v Central Electricity Regulatory Commission (Supreme Court of India, 11 April 2017, 2017 SCC OnLine SC 378), power producers with fixed-tariff power purchase agreements argued that a sharp, unforeseen rise in imported coal prices, caused by a change in Indonesian export-pricing law, should excuse them from their pricing obligations, under the force majeure clause or, failing that, under Section 56.

The Supreme Court rejected both routes. A mere rise in fuel price, making performance more expensive, is not a force majeure event; the clause covered physical and legal impediments to performance, not commercial hardship. And because the contract already had a force majeure clause governing the situation, Section 32 applied to it and Section 56 could not be separately invoked to reach a different outcome:

"...when a contract contains a force majeure clause which on construction by the Court is held attracted to the facts of the case, Section 56 of the Contract Act can have no application."

The Court drew this from its own earlier authority, Satyabrata Ghose v Mugneeram Bangur & Co (Supreme Court of India, AIR 1954 SC 44), the founding case on Section 56 in India. There, a housing plot buyer argued that wartime government requisition of the land frustrated the sale contract. The Court held that "impossible" under Section 56 is used in a practical, not literal, sense: a contract is frustrated when a supervening event strikes at its very root, not merely when it becomes harder, slower, or costlier. On the facts, temporary requisition with no fixed completion date did not go to the root, so it was not frustrated. Read together, the two cases give the full Indian rule: Section 56 sets a genuinely high bar, and Section 32 takes over entirely wherever an express force majeure clause already covers the ground. See the Energy Watchdog judgment and the Satyabrata Ghose judgment on Indian Kanoon.

Practically, you cannot treat your force majeure clause as a floor with Section 56 as a backup net. If the clause is narrow and does not cover your event, that narrowness is very likely the end of the argument, not the start of a fallback one.

Red flags

Normal	Red flag	Why it matters
Trigger list has a genuine catch-all: "or any other event beyond the reasonable control of the affected party"	Closed list, only named perils, no catch-all	An unnamed but real disruption, a pandemic, a cyberattack, a port shutdown, falls outside the clause entirely
Notice required within a stated window (commonly 3 to 15 days), with a stated consequence for missing it	No notice requirement stated at all	Invocation timing becomes a dispute in itself; courts may still expect "reasonable" notice, an ambiguous standard to litigate
"Epidemic," "pandemic," or "public health emergency" listed, given COVID-era drafting norms	Pandemic or epidemic not listed, and no working catch-all	Leaves the single most litigated force majeure scenario of the last decade arguably outside the clause
Clause expressly excludes "inability to pay" or "market or price fluctuations" from qualifying events	"Economic hardship" or "commercial unviability" claimed, or arguably claimable, as force majeure	Energy Watchdog forecloses this directly; ambiguity invites exactly this losing argument
A long-stop period (commonly 30 to 90 days) after which either party may terminate if the event continues	No termination right at all, obligations suspend indefinitely	Locks both sides into a going-nowhere contract with no exit if the disruption becomes permanent
Mitigation duty stated explicitly	Clause is silent on mitigation	Invites a party to treat force majeure as a reason to stop trying, not a reason it could not succeed despite trying
Payment for work already delivered is carved out of the force majeure excuse	Clause allows suspension of already-accrued payment too	Turns a performance excuse into a cash-flow weapon against the other side

Bad clause → better clause

Bad: "Neither party shall be liable for any failure or delay in performance due to causes beyond its reasonable control. The affected party's obligations shall be suspended for so long as such cause continues."

What is wrong: no defined trigger list, so "beyond its reasonable control" could arguably cover cost increases, no notice requirement, no mitigation duty, and no long-stop right to terminate an indefinite disruption.

Better: "Neither party shall be liable for failure or delay in performing its obligations (other than payment obligations for goods or services already delivered) to the extent caused by war, flood, earthquake, epidemic or pandemic, government-imposed lockdown or export restriction, or any other event beyond the reasonable control of the affected party which could not have been avoided by reasonable diligence (a 'Force Majeure Event'), provided that a rise in the cost of inputs, currency fluctuation, or general commercial hardship shall not constitute a Force Majeure Event. The affected party shall notify the other party in writing within 7 business days of the Force Majeure Event and shall use reasonable efforts to mitigate the delay. Affected obligations shall be suspended for the duration of the Force Majeure Event. If it continues for more than 60 consecutive days, either party may terminate this Agreement on written notice, without penalty."

What changed and why: the trigger list is defined with a pandemic entry and a genuine catch-all, cost increases and hardship are expressly excluded so Energy Watchdog's holding is written into the clause rather than argued later, there is a firm notice deadline, a mitigation duty, a carve-out for already-earned payments, and a long-stop termination right so the contract cannot be suspended forever.

How it interacts with related clauses

Force majeure rarely operates alone. Three related clauses decide how much it actually protects you:

• Termination. If your force majeure clause has no long-stop right, check whether the general termination clause gives either party an exit for prolonged non-performance, else you can end up contractually stuck.
• Limitation of liability and indemnity. Force majeure does not automatically excuse liability for losses that arose before the event, or obligations the clause does not cover, such as confidentiality or IP indemnities.
• Change in law. Some contracts split this into a separate clause, particularly in regulated sectors like energy, the kind of contract at issue in Energy Watchdog. Check the two do not conflict.

You can mark up how a force majeure clause reads against these related clauses directly in your document, for free, using Weave, which lets you flag and comment on clauses like this before you send a contract back for negotiation.

US and global contrast

US contract law has no direct statutory equivalent to Sections 32 and 56. Force majeure there is almost entirely a creature of contract; if the clause does not cover an event, the common-law doctrines of "impossibility" and "commercial impracticability" (the latter recognised for goods under the Uniform Commercial Code) can sometimes fill the gap, and US courts have at times read commercial hardship into those doctrines during extreme disruptions, more readily than Indian courts do. The outcome is similar either way, a narrow clause is a real risk, but for a different reason: the US fallback is judge-made and shifts case by case, while the Indian fallback, Section 56, is a fixed statutory provision the Supreme Court has held does not even apply once a force majeure clause covers the field. This makes Indian drafting more, not less, important: if your clause misses the event, there is usually no second chance.

FAQ

If my contract does not have a force majeure clause at all, can I still claim frustration? Yes. Section 56 exists precisely for that gap, a contract silent on force majeure. But the bar is high: under Satyabrata Ghose, the event must strike at the root of the contract and make performance impossible in a practical sense, not just harder, slower, or costlier.

Can I claim force majeure because a supply contract became commercially unviable? No, not on that basis alone. Energy Watchdog v CERC directly holds that a rise in cost, even a sharp and unforeseen one, is not a force majeure event. Your clause would need to expressly list price or cost events as qualifying, which most well-drafted clauses deliberately exclude.

Does force majeure automatically terminate the contract? Usually not immediately. Most clauses suspend the affected obligations first and only allow termination if the event continues past a stated long-stop period. With no such period, you may be stuck in indefinite suspension with no clean exit.

Was COVID-19 automatically covered by every force majeure clause? No, it depended entirely on the wording. Clauses with a genuine catch-all, or that named "epidemic" or "pandemic," were more likely to cover it. A closed list of named perils that did not include anything like a pandemic left real doubt, which is why post-2020 drafting now routinely names epidemics and pandemics explicitly.

Do I need to give notice to invoke force majeure, even if the clause does not say so? It is safer to assume yes. Delaying without communication weakens your position and can look like the disruption was not the real reason for non-performance. Where the clause states a deadline, missing it can forfeit the right to claim the excuse, so calendar it the moment a qualifying event starts.

This guide gets you to understanding what a force majeure clause does under Indian law and when Section 56 can, and cannot, help you if it does not. It does not tell you whether a specific event qualifies under your specific clause, that depends on the exact wording, the facts of the disruption, and how a court would construe them together, and is not legal advice. Talk to a lawyer before you invoke, or reject, a force majeure claim in a live contract.