Force Majeure Clauses: Drafting Them So They Actually Work

This article is general information only, not legal advice, and not solicitation of work. It should not be relied upon as a substitute for advice on your specific facts.

Why Generic Force Majeure Clauses Fail

Many contracts still carry a boilerplate force majeure clause copied from a template, listing events like war, flood, and government action without connecting them to how performance under that specific contract could actually be affected. When a real disruption occurs, vague clauses generate disputes about whether they even apply, exactly when courts and tribunals have found against parties trying to invoke them.

What a Court Actually Looks For

Indian courts, and arbitral tribunals applying Indian law, generally require that the event was unforeseeable, beyond the party’s reasonable control, and that it actually, not just inconveniently, prevented performance. A party that could have performed at higher cost, or through an alternative method, is usually not excused merely because performance became less commercially attractive.

Drafting Clauses That Hold Up

An enforceable clause defines qualifying events with reasonable specificity relevant to the contract’s subject matter, sets out a notice obligation requiring the affected party to inform the other side promptly, states the consequence, suspension, extension of time, or termination if the event continues beyond a defined period, and addresses whether payment obligations already accrued are excused or merely deferred.

The Alternative: Material Adverse Change and Hardship Clauses

Where the concern is less an inability to perform and more a fundamental change in economic circumstances, a hardship or material adverse change clause, allowing renegotiation rather than outright excuse, is often a better fit than stretching force majeure to cover a situation it was never designed for.

This note is prepared by our Corporate & Startups team. If you are dealing with a related situation, get in touch with us.