Law:

Section:

(a) Contract------- --------Force majeure, doctrine of------- Applicability-------Force majeure refers to legal or physical prevention and not economic activity which is not profitable-------Change in economic or market circumstances, affecting profitability of a contract or the case in which parties' obligation can be performed is not regarded as being a force majeure event. Advanced Law Lexicon by P. Ramanatha Aiyar, 3rd Edition; Halsbury's Laws of England, 4th Edition, Volume 51; Dhanrajamal Gobindram v. Shamji Kalidas AIR 1961 SC 1285; M/s. Alopi Parshad v. Union of India AIR 1980 SC 588; Brauer & Co. (Great Britain), Ltd. v. James Clark (Brush Materials), Ltd. [1952] 2 All ER 497 and Thames Valley Power Ltd. v. Total Gas and Power Ltd. [2006] 1 Lloyd's Rep. 441 rel. (b) Contract Act (IX of 1872)------- --------S. 126-------Contract of guarantee or surety-------Scope-------Guarantee, genesis of-------Guarantee envisages two contracts, one between principal debtor and creditor and second between creditor and surety-------Guarantee has its genesis in underlying contract between principal debtor and the creditor-------Irrevocable and unconditional bank guarantees are normally couched in a language whereby bank undertakes to give money to the beneficiary on demand without demur or protest-------If a bank guarantee is unconditional stipulating that the bank should pay, on demand, without demur and that the beneficiary is the sole judge not only on the question of breach of contract but with respect to the amount or loss or damage, the obligation of the bank has to be discharged in the manner provided in the bank guarantee-------When such demand is made, the bank is not permitted to probe into the disputes between the parties-------Court should not interfere directly or indirectly to withhold payment, otherwise trust in commerce internal and international may be irreparably damaged. Haral Textiles Milited v. Banque lndosuez Belgium, S.A. 1999 SCMR 591; Shipyard K. Damen International v. Karachi Shipyard and Engineering Works Ltd. PLD 2003 SC 191 and Standard Construction Company (Pvt.) Limited v. Pakistan, through Secretary M/o Communications and others 2010…