Frustration of Contract Due to COVID-19, a Swing Too Far

Abstract

The world is facing an unprecedented health crisis in the form of the COVID-19 pandemic, as the governments around the world are busy tackling the pandemic, its impact on the commercial sector is indeed a matter of serious concern. Almost all businesses are facing severe hardships due to the necessary quarantining measures undertaken by the government, almost all the market players, across all the business sectors, are skeptical about the execution of their contractual obligations, and this has (as rightly noted by economist) has resulted in a tidal wave of firms who have invoked their force majeure clause in order to avoid penalties for non-performance of the contract, however, it shall also be taken into consideration that many contracting parties do not have an explicit force majeure clause in their contract.Henceforth the article tries to analyze, whether in the absence of an explicit agreement, can a party be exempted to perform its contractual obligation due to COVID -19 pandemic, as per the statutory provision of frustration enshrined under section 56 of the contract act.