ABSTRACT
One of the biggest impediments of International trade is lack of harmony in the laws of the nations and international standards. In order to appear appealing platforms for international trade countries adopt conventions and harmonise the national laws according to international standards. Contracts are integral part of business transactions, both domestically and internationally. Therefore, adequacy of remedies and obligations with respect to international standards ensures that a country thrives in international trades.
Part 1 of this paper analyses the inadequacy of Indian Contract act with regard to providing exemptions for non-performance of contract. It discusses the interpretation of the available exemptions, in the form of force majeure clauses and the doctrine of frustration, by the Indian Judiciary and underscores the high threshold for the relief. In India, the courts have a strong emphasis on upholding the exact terms of contracts, often leading to limited options for seeking relief, even in extraordinary circumstances like the COVID-19 pandemic.
In Part II, the paper shifts its focus to Article 79 of the United Nations Convention on Contracts for the International Sale of Goods (CISG), which provides exemptions for contractual non-performance. It focuses on the doctrine of hardship within Article 79, its applicability, and the flexibility it offers compared to Indian legal doctrines.
Part III of the paper makes a compelling case for India to embrace Article 79 of the CISG. It argues that doing so would not only bring Indian law in line with global standards but also bolster the country’s standing in the international trade arena. By adopting this provision, India could create a more appealing legal environment in domestic laws as well as foreign trade and investment, while simultaneously granting parties greater control over their contractual affairs.
Janwa, Isha, Navigating Contractual Non-Performance: Embracing CISG Article 79 in Indian Contract Law (March 14, 2024).
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