Force Majeure vs. Unforeseen Circumstances In Indian Real Estate

1.  Introduction

India’s real estate sector has witnessed unprecedented growth over the last decades, driven by institutional investment, large-scale urbanization and increasingly sophisticated contractual structures. As projects become larger and transaction timelines longer, contracting parties are placing greater emphasis on contractual risk allocation. Among the provisions attracting increased attention are force majeure clauses and contractual protections against unforeseen circumstances.

Although often conflated in negotiations, Indian law treats these concepts as distinct. Force majeure is a contractual mechanism rooted in the Indian Contract Act, 1872 (“Act”), whereas unforeseen circumstances refer to commercial developments that alter transaction assumptions without necessarily excusing performance¹.