Abstract
The paper examines the legal implications and impact of The Indian Contract Act, 1872.[1] It analyses the judicial approach towards enforcing contractual obligations during and after the pandemic, with a particular focus on the doctrine of frustration and impossibility under The Indian Contract Act, 1872[2]. Beyond these legal principles, the study also explores government interventions and their effects on contractual obligations. Additionally, it reviews, landmark, judicial decisions related to Covid-19 and The Indian Contract Act, 1872, providing a comprehensive assessment of how the pandemic has influenced contractual enforcement and legal interpretations in India.
Introduction
Covid- 19 was officially declared a global pandemic on March 11, 2020. The outbreak, caused by the novel coronavirus (SARS-CoV -2), was first detected in December 2019 in Wuhan, the capital of China’s Hubei province, before rapidly spreading to over 180 countries and regions worldwide[3]. The emergence triggered a severe global health crisis, leading to widespread lockdowns across the world. Governments of the countries throughout the world implemented travel restrictions and mobility limitations which brought domestic and international trade to still. It had placed immense strain on numerous economies, impacting both the poor and the wealthy, the vulnerable and the powerful, the young and the old. It reshaped international relations, disrupted the global economy, caused resource shortages, and led to countless other issues – both major and minor. In India, Prime Minister Shri Narendra Modi declared “Janta Curfew” on March 22, 2020 and later called for a nation-wide lockdown from March25, 2020. The pandemic unleashed a catena of contractual disputes. Contracts play a vital role in daily life, particularly in the corporate sector. The main purpose of a formal, legally binding agreement is to hold parties accountable for fulfilling their agreed-upon obligations. If a party fails to meet the terms of the contract, they incur contractual liability. The Indian Contract Act, 1872[4] defines the fundamental principles of the contract and establishes the rights and duties that bind the involved parties once they enter into an agreement. The lockdown widely implemented to curb the pandemic, had imposed significant financial burdens or business, making it difficult- and in many cases impossible- for them to fulfill contractual obligations. Borrowers have defaulted on debts, contractors had missed project deadlines, and employers have reneged on promised employee benefits. These breaches had led to a surge in legal claims as affected parties were seeking compensations. This article will explore the concept of force majeure, doctrine of frustration and impossibility may legally excuse a party from performance of contracts in light of the disruption caused by Covid-19 pandemic.
[1]The Indian Contract Act,1872.
[2]ibid
[3](June 21, 2021), https://www.indiacode.nic.in/bitstream/123456789/2187/2/A187209.pdf.
[4]Supra Note 1