Para 9.8.4 — GOODS_MANUAL

9.8.5 Limitation of Liabilities 1. Except in cases of criminal negligence or wilful misconduct, the aggregate liability of the parties, whether under the contract, in tort or otherwise, shall not exceed the total Contract Price (less payments already made in case of procuring entity), provided that this limitation shall not apply to the cost of repairing or replacing defective equipment/ work under warranty Clause, Defect Liability clause or otherwise, or to any obligation of the contractor to indemnify the Procuring Entity concerning IPR infringement. 2. Neither Party shall be liable to the other Party, whether in contract, tort, or otherwise, for any indirect or consequential loss or damage, loss of use, loss of production, or loss of profits or interest costs, which the other Party may suffer in connection with the Contract, provided that this exclusion shall not apply to any obligation of the Contractor to pay liquidated damages to the Employer.

9.8.4 Frustration of Contract Upon a supervening cause occurring after the effective date of the contract, including a change in law beyond the control of either party, whether because of the Force Majeure clause or within the scope of section 56 of the Indian Contract Act, 1872, that makes it impossible to perform the contract within a reasonable timeframe, the affected party shall give a ‘Notice of Frustration Event’ to the other party giving justification. The parties shall use reasonable efforts to agree to amend the contract as may be necessary to complete its performance. However, if the parties cannot reach a mutual agreement within 60 days of the initial notice, the Procuring Entity shall issue a ‘Notice for Determining the contract’ and terminate the contract as per para 9.8.3 above, due to its frustration, without repercussions on either side.

9.9. Dispute Resolution 1. Normally, there should not be any scope for dispute between the purchaser and supplier after entering a mutually agreed valid contract. However, due to various unforeseen reasons, problems may arise during the contract, leading to a dispute between the purchaser and the supplier. Therefore, the conditions governing the contract should contain suitable provisions for the settlement of such disputes or differences binding on both parties.

2. All disputes and differences between the parties, as to the construction or operation of the contract, or the respective rights and liabilities of the parties on any matter in question or any other account whatsoever, but excluding the Excepted Matters (detailed below); arising out of or in connection with the contract, within thirty (30) days from aggrieved Party notifying the other Party of such matters; whether before or after the completion/ termination of the contract, that cannot be resolved amicably between the Procurement Officer and the contractor within thirty (30) days from one party notifying the other of such matters, whether before or after the completion or termination of the contracts, shall be referred to as a “Dispute”.

3. In its directives115 regarding contractual disputes, Department of Expenditure, Ministry of Finance has stressed that:

“Government departments/ entities/ agencies should avoid and/ or amicably settle as many disputes as possible using mechanisms available in the contract. Decisions should be taken in a pragmatic manner in overall long-term public interest, keeping legal and practical realities in view, without shirking or avoiding responsibility or denying genuine claims of the other party.”

4. The aggrieved party shall give a ‘Notice of Dispute’ indicating the Dispute and claims, citing relevant contractual clauses to the designated authority, and requesting to invoke the following dispute resolution mechanisms. The Dispute shall be attempted to be resolved, as far as feasible, before recourse to courts through dispute resolution mechanisms available in the contract, in the sequence as mentioned below, and the next mechanism shall not be invoked unless the earlier mechanism has been invoked or has failed to resolve it within the deadline mentioned therein.

5. While processing a case for dispute resolution/ litigation/ arbitration, the procuring entity is to take legal advice at appropriate stages.

a) Adjudication b) 116Mediation c) Arbitration