Question

‘X’ and ‘Y’, enter into a contract (i.e. X and Y are parties to the contract) for supply of goods by X to Y in exchange for payment from Y to X.
Consider the following Clause in the contract :
(Sub-Clause 1) Neither party shall be held liable for failure to comply with its obligations under this contract if such failure is due to any kind of natural disaster or human event beyond its control.
(Sub-Clause 2) The successful invocation of this Clause by either party shall protect that party from liability for non-fulfilment of its obligations under the contract only until the natural disaster or human event in Sub-Clause 1 continues to affect that party.”
The contract requires X to deliver goods from his house to Y’s house latest by 30th May. Both X and Y live in the same city. On the morning of 30th May, there is a big earthquake near X’s house which causes all roads in the area to be blocked. The
blockage remains present until 31st May.
Can X claim that this situation falls under Sub-Clause 1 ?

• A. Yes, because the earthquake is a natural disaster beyond X’s control.
• B. Yes, because X’s failure to deliver the goods to Y by 30th May was due to the earthquake.
• C. No, because X could have delivered the goods to Y before 30th May and his failure to deliver the goods to Y is due to his laziness and not only due to the earthquake.
• D. Combination of options ‘a’ and ‘b’.

Answer 1

Answer: (D)

Combination of options ‘a’ and ‘b’.

Answer 2

The correct option is (D): Combination of options ‘a’ and ‘b’.