Effects Of War On Contracts

Kashvi Sharma, Symbiosis Law School, Noida

INTRODUCTION

The repercussions of war are extensive, leaving profound and enduring effects on individuals, societies, economies, and the environment. One aspect often overlooked is the impact of war on contracts. Wars can disrupt economies, create legal uncertainties, and strain international relations, leading to substantial implications for the enforcement and fulfilment of contracts. Contracts formed during wartime often fall under the category of "impossible contracts" due to the challenging circumstances that make it arduous for both the promisor and promisee to fulfil their contractual obligations. In such cases, the promisor may cite "force majeure" or the occurrence of an unavoidable event beyond their control as a reason for non-performance. During war, frustration can arise when parties in enemy nations face regulatory bans and government-imposed restrictions, making it impossible for them to conduct trade or fulfil contractual commitments. By examining the legal framework, this research sheds light on the challenges that contracting parties encounter during times of conflict and explores potential mechanisms for addressing contract-related issues in such situations.

RESEARCH QUESTION

Can force majeure and frustration of contract be used as an excuse by the promisor for the non- performance of the contract during the war even though he was aware of the war threats beforehand?

ANALYSIS

“Force Majeure” is “an incident or consequence that cannot be predicted or controlled is unanticipated, and prohibits someone from doing or fulfilling anything that he/she had agreed or formally intended to accomplish”. The Webster's dictionary defines force majeure as1 “a superior or unstoppable force,” known as The Act of God in layman's language. According to the Black's Law Dictionary, force majeure is a contractual clause that allocates the risk of loss if the performance becomes impossible or impractical, mainly due to an occurrence that the parties could not have predicted or controlled. This provision is included in all contracts, including commercial contracts, project financing, and manufacturing contracts. It is regarded as an essential provision since it exempts one party from executing the obligation in the event of Force Majeure. It protects against the breach of contract.