COVID-19 and Supreme Court Contractual Disputes in India: A Law and Economics Perspective

Abstract

The COVID-19 pandemic has unleashed a catena of contractual disputes. The paper synthesizes the Indian Contract Act and relevant case laws to present a legal position on force majeure, the frustration of contract and contractual gaps, in the context of COVID-19. Using the economic analysis of law, it examines contractual disputes from various sectors, including power, construction and real estate, rental, event management and hospitality, and analyses these disputes from legal- and economic-efficiency points of view. Where contracts are not a good instrument for achieving equitable distribution of economic gains and losses, public policy is better suited to address equity and other related issues arising from long-term contracts.

Keywords: COVID-19, force majeure, frustration of contract, act of god, act of government, contractual disputes, Indian Contract Act, public policy

JEL Classification: K12, D86