The Ability of a State-Owned Enterprise to Declare Force Majeure Based Upon Actions of the State
Mondaq Business Briefing › India Law Articles in English (2003)
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The Ability of a State-Owned Enterprise to Declare Force Majeure Based Upon Actions of the State
A party's obligations under a contract may be discharged where "performance is made impracticable without their fault by the occurrence of an event the non-occurrence of which was a basic assumption" at the time the parties entered into the agreement.1 A force majeure (or Act of God) is the contract term for such an event. Contracts often contain a force majeure clause in order to specify the parties' obligations in the case of such an event. A force majeure clause is "a contractual provision allocating the risk if performance becomes impossible or impracticable as a result of an event or effect that the parties could not have anticipated or controlled."2 In terms of international law, this may lead to a situation where a state owned company is discharged from its obligations under a contract with a pr...
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