In the famous Energy Watchdog v CERC case at the Supreme Court, Adani Power tried unsuccessfully to terminate a force majeure contract. In 2017, the company had won an offer to supply the Haryana government. At the time, the company expected that the current energy charges and to be paid by the government would not degenerate. A few years later, an increase in the price of Indonesian crude coal led Adani Power to challenge the Supreme Court to terminate the contract on the basis of a force majeure case. Coal prices in Indonesia were not revised 40 years before the supply was submitted, they argued. The Tribunal found, however, that the bidder should be aware of the risk of increasing or variable cost of raw materials when submitting the offer and therefore rejected cases of force majeure. As this case shows, a case of force majeure did not occur simply because an agreement is no longer financially viable. An agreement is defined as „any promise and set of promises that make for each other. If a proposal is adopted, it becomes a promise. Therefore, an agreement is a proposal adopted.
To reach an agreement, there must therefore be a proposal or offer from one party and its acceptance by another party. In short, proposal for an agreement – adoption. A contract is a legally applicable agreement. The agreement still exists between two or more parties, but no less than two parties. An agreement consists of promises between the two parties. For the formation of a contract, an agreement must contain the following: the definition of the contract is given in accordance with the S.2 (h) of the Indian Contract Act, which provides that a „contract is a legally enforceable agreement“. Therefore, a contract is an agreement between two or more parties that will enforce the law. The second part of the definition relates to the applicability of the law. An agreement is enforceable u/s 10 if it is concluded by competent parties, their free consent and legitimate rebuttal and consideration. Therefore, a contract – agreement – enforceable. Therefore, all contracts are agreements, but not all agreements are necessarily contracts. An empty shopping mall in Ahmedabad, March 16, 2020.
Photo: REUTERS/Amit Dave/File Photo Several large commercial buildings have already invoked force majeure provisions to stop the payment of royalties and curb the summoning of penalties.