Covid 19 global impact on contracts

In the present global crisis of COVID-19, Force Majeure clause has gained most attention in contracts these days.

What to do if the parties have/or have not mentioned this clause and how to exercise it or create or execute a balance in performance and who will bear loss occurred due to non-performance.

Keeping in mind the “going concern” principle of business and leaning on a fact of mutual trust and cooperation which creates building block for the entire business community, enlarged scope of this clause as per Government notification and exercise it in the present situation.

Following would be my suggestions in dealing with Force Majeure notices- 

• Step 1 Calculation of the value of contract and have an expert evaluation on percentage of unperformed part, Get an overview of exact loss value. Have an eye on possibilities of altering, changing, shifting and take steps towards curative methods.  
• Step2 An open minded analysis of unperformed part, even with a delay, can the contract still be performed during or after lockdown and creating a mutual understanding by taking shelter of other clauses covering delays/non performance such as Guarantee, grace period etc. 
• Step 3 If scenario is such where there is absolutely no way of performance, doctrine of frustration of contract and clauses related therewith shall be evoked.
• Step 4 It's the obligation on both ends to send/ receive replies or notice of non performing grounds and evidence related to the same.
• Step 5 In case of time extension/alterations/amendments etc are approved by the parties. Regular updates, notifications on status of contract execution, information shall be given by the performing parties. 

Whole idea of contracting is to ease out any business process and execute a commitment alongside narrowing down the risk areas of confusion and vision for all possible disputes or non performance. Therefore perspective of business should be towards execution in any situations if possible, if not, reliving the parties from obligations as soon as possible by frustrating the contract and abide by the agreed upon terms at the time of ending contract.