When Compliance With Law Becomes An Impossibility - Looking Beyond Force Majeure: COVID – 19 Fallout

When a party to a contract is unable to perform its contractual obligation due to a supervening impossibility which the party could not prevent, then the defaulting party may be excused from performance of the contract in accordance with section 56 of the Indian Contract Act, 1872 or if the contract has a force majeure clause then in accordance with such clause - what is popularly referred to as the force majeure exclusion. This is as far as compliance with contracts are concerned. But what happens if compliance with a law becomes impossible? This is a question which has gained relevance in light of the current COVID-19 induced lockdown. While the government has announced relaxations from certain regulatory compliances, there are still many compliances which companies may find difficult to comply with. There could also be certain benefits which a company may fear losing as a result of interruptions in business, and furthermore companies may be looking at some