Commercial impracticability under the Indian law of contract: assessing the role of the Unidroit principles

Khanderia, Saloni (2018) Commercial impracticability under the Indian law of contract: assessing the role of the Unidroit principles. UCL Journal of Law and Jurisprudence. pp. 52-71. ISSN 2052-1871

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The present era of heightened liberalization has encouraged an increasing number of jurisdictions across the globe to offer some respite to the parties of a contract when they experience a subsequent, unforeseen change in circumstance that results in commercial impracticability or hardship. However, there are sufficient judicial dicta in India, which is a common law jurisdiction to demonstrate a certain hostility in recognizing the occurrence of any such situation that is short of impossibility within the precepts of Section 56 of the Indian Contract Act, 1872. The blind adoption of the traditional common law principles have proven unsuitable in resolving the predicaments that may arise in modern-day contracts, which are often affected by inflation and other legal or political changes; and have the potential to alter the contracted price of performance to the detriment of one party. The present author suggests that the Indian courts should therefore begin referring to the International Institute for the Unification of Private Law’s [UNIDROIT] approach espoused in its Principles on International Commercial Contracts [the UPICC]. Unlike the Indian law of contract, the UPICC adopts a dichotomy between the theories of hardship and force majeure and consequently provides different solutions to address these matters. Employing the UPICC as a gap-filler will assist the Indian courts in interpreting these issues according to well-defined and internationally accepted standards so that the parties can receive fair and adequate redress when the performance of their contract has been affected by hardship.

Item Type: Article
Keywords: commercial impracticability | hardship | force majeure | Indian law of contract
Subjects: Social Sciences and humanities > Social Sciences > Law and Legal Studies
JGU School/Centre: Jindal Global Law School
Depositing User: Arjun Dinesh
Date Deposited: 23 Jun 2022 09:35
Last Modified: 23 Jun 2022 09:35
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