Vis-Major (Act of God)

Introduction

Vis-Major is a term which means “An Act of God” that defines “natural occurrence that causes damage or disruption and that is neither caused by nor preventable by humans”. The term is one of the defences of Inevitable Accident. Vis Major is something which happens naturally and is not easy for a human being to identify for example, earthquake, floods, tornados etc. Vis-major is simply a contract which keeps a condition that if such an incident takes place there will be no liability for both the parties to compensate. There is one more defense for inevitable i.e. ‘force majeure’ which is used differently.

The Bollywood movie named “Oh My God” is inspired from this concept, wherein a Business man named Kanji Lalji Mehta’s store of God’s statues was totally destroyed because of earthquake and when he claimed the insurance, the insurance company was not liable to compensate since the incident was proved to be an “Act of God” and the same was an exception in his insurance document.

This term “Act of God” can be traced back in the 13th century specifically referring to all the acts which god has undertaken and are beyond human control. This term later evolved in the legal field and was first used by Lord Ellenborough (16 November 1750 – 13 December 1818) in 1803 as:

“By Common Law, Carriers are insurers against every loss of property entrusted to their care, except losses arising from the Act of God, or the King’s enemies.”

Later it was defined in various books and dictionary including Peter Simmonds’ Dictionary of Trade Products, 1858 as “Any act which is outside human control and therefore not the responsibility of any individual or corporation”.

Till this time this phrase was in use in both legal field and insurance sector where the insurance companies cannot be claimed for the damages occurring by any event which is covered under the phrase “Act of God”. Force Majeure traces back its origin to the “Napoleonic Code”, where as in common law system the concept has evolved from one of “physical impossibility” to “frustration of purpose” (U.K.) to “commercial impracticability” (U.S.).

Indian Laws in Relation to Act of God

As per section 56 of the Indian Contract Act, 1872 an agreement to do an act impossible in itself is void. A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
Where one person has promised to do something which he knew, or, with reasonable diligence, might have known and which promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which promisee sustains through the non-performance of the promise.

The agreement in this particular section explains:

Agreements to do an unlawful act;
Agreements to do an impossible act;
Agreements to do an act which is both possible and legal, but which after the contract is made, becomes impossible;
Agreements to do an act which is both possible and legal, but which after the contract is made, by reason of some event, which the promisor could not prevent, become unlawful.

The Rangoon Telephone Company Limited was operating telephone and telegraph undertakings in Rangoon and Moulmein before war under a licence. Under clause 8 of the licence Government could buy the Company out, if the right was exercised at the end of 40th year and by the letter dated 4th March, 1940 Government exercised the option to purchase as on 31st March, 1943. War broke out and part of property was demolished under the denial scheme. The remaining properties were taken over on 1st January, 1946. The Company claimed a high amount as the value under contract or as damages. Government contended that they were liable what was taken over. It was held that frustration is the premature determination of an agreement lawfully entered into between parties owing to circumstances so fundamental as to be regarded by the law both as striking at the root of that agreement as entirely beyond what was contemplated by the parties when they entered into the agreement. This principle is embodied in section 56 of the Contract act. The contract of purchase in this case was frustrated on account of the war.

In the law of Contract, an act of God may be put forward as an implied defence under the rule of impossibility or impracticability. If so, the promise is discharged because of unforeseen occurrences, which were unavoidable.

For example, a dress designer and a fashion show enter into a contract wherein the dress designer promises to design dresses for models on certain time on a certain date and the fashion show company promises the designer to provide equipment as well the assistance. However, because of huge flood, the dress designer was unable to reach the respected place and it may either be impossible for him to reach in time or it may be possible but extraordinarily expensive to reach there on such short notice. The dress designer would argue that the flood was an act of God and excuse its non-performance via impossibility.

OkVis-Major in Tort Law

When a tort is committed, meaning that a defendant’s actions interfered with the plaintiff’s person or property, a plaintiff’s consent will excuse the defendant of the wrongdoing. Although a defendant’s conduct may be considered immoral, or harmful, if the plaintiff allows these interferences to occur, then the defendant is not considered to have committed a tort.

Consent occurs when a plaintiff displays a willingness to participate in the defendant’s conduct. The defendant may infer consent from the plaintiff’s actions the way any reasonable man would. In some cases, silence and inaction may manifest consent when it is reasonable to assume that a person would speak or act if he objected to the defendant’s actions.

Suppose there is a pile of old things that you have kept aside to dispose or give away. Now if some worker takes an old painting from the pile in your presence and you don’t have any problem with that then, you cannot later claim the painting and it is reasonable to assume that the servant obtained your consent before taking it.

This incapacity must interfere with the plaintiff’s ability to weigh the benefits and consequences of the defendant’s suggested conduct. A person suffering from bouts of insanity cannot be expected to be able to give proper consent and anyone who takes advantage of that fact and puts him under any risk of injury shall not have the defence of consent.

‘Whenever there is vis-major there are Natural Causes behind’

Vis-Major is an uncommon and an unforeseen accident by the forces of nature or a misfortune or accident arising from inevitable necessity. An act of god cannot prevent by reasonable human foresight and care.

He effects of ordinary causes may be foreseen and avoided by the exercise of human care. For example, the fact that rain will leak through a defective roof is foreseeable by an ordinary man. In case of foreseeable causes, failure to take the necessary precautions constitutes negligence, and the party injured in the accident may be entitled to damages. An act of God, therefore, is so extraordinary and devoid of human agency that reasonable care would not avoid the consequences. Therefore, in such cases the injured party has no right to damages.

Gillick v. West Norfolk & Weisbeck Area Health Authority

Gillick was a mother of five daughters which were under the age of 16. She wanted a declaration that it would be unlawful for a doctor to prescribe contraceptives to girls under 16 without the knowledge or consent of the parent. The court refused to give such a declaration. Lord Fraser in his judgment said that:

“It seems to me verging on the absurd to suggest that a girl or a boy aged 15 could not effectively consent, for example, to have a medical examination of some trivial injury to his body or even to have a broken arm set. Provided the patient, whether a boy or a girl, is capable of understanding what is proposed, and of expressing his or her own wishes, I see no good reason for holding that he or she lacks the capacity to express them validly and effectively and to authorize the medical man to make the examination or give the treatment which he advises After all, a minor under the age of 16 can, within certain limits, enter into a contract. He or she can also sue and be sued and can give evidence on oath. I am not disposed to hold now, for the first time, that a girl aged less than 16 lacks the power to give valid consent to contraceptive advice or treatment, merely on account of her age. Thus, we can see how the ability to give consent is determined in different cases with respect to the facts in the given situation.

Consent is usually expressed in law through the Latin phrase “Volenti non fit injuria”. The meaning of which is, ‘to one who volunteers, no harm is done’. It is often stated that the claimant consents to the risk of harm, however, the defence of volenti is much more limited in its application and should not be confused with the defence of consent in relation to trespass. The defence of volenti non fit injuria requires a freely entered and voluntary agreement by the claimant, in full knowledge of the circumstances, to absolve the defendant of all legal consequences of their actions. A corollary of this principle is “Scienti non fit injuria” which means that only knowledge of the risk is not enough to claim defence there must be accepted to undergo the resultants of the risk undertaken. There had to be consent and mere knowledge is not sufficient.

R v. Williams

In the given case the defendant was a singing teacher. He said that he was doing an act of opening air passage of one of the student however, what he was actually doing was sexual intercourse with her. It was held that her consent was vitiated by fraud. This case has been used to illustrate the validity of a consent which has been obtained by unfair means. In another case, the defendant was sued by an employee who claimed that he sustained injuries while in the course of working in their employment. He was employed to hold a drill in position while two other workers took it in turns to hit the drill with a hammer. Next to where he was working another set of workers were engaged in taking out stones and putting them into a steam crane which swung over the place where the claimant was working. The claimant was injured when a stone fell out of the crane and struck him on the head. It was said that the claimant might have been aware of the danger of the job but did not consented to the lack of care. He was therefore entitled to recover damages.

For a claim of volenti it is necessary that there is an agreement between the parties which may be express or implied. An implied agreement may exist where the claimant’s action in the circumstances demonstrates a willingness to accept not only the physical risks but also the legal risks.

Vis-Major as a Condition in Insurance Contract

Insurance contracts often exclude coverage for damage caused by vis major, such as tornadoes, hurricanes, earthquakes, and floods. This means the owner is on the hook for any costs associated with replacement or repair to the property without any help from the insurer, even if a policy is in place. A finding that an adverse event was caused by vis major can also exempt a defendant in a lawsuit from liability. In terms of insurance, an Act of God is an act of nature that couldn’t have been foreseen or avoided. It describes an event:

Where no blame can be assigned to a person.
That couldn’t have realistically been prevented.
Brought about as a direct result of natural causes.

Examples of events that would most likely be classed as Acts of God have included, floods, lightning storms, hail, tornadoes or earthquakes. The legal usage of Act of God is based in Roman law and first appeared in English verdicts somewhere around the 16th century. It allowed someone to be excused for not appearing in court if a ‘superior force’ – some unavoidable calamity – had prevented them from doing so.

As time went on, it worked its way into insurance law, as a legal ruling published in the Times in 1803 illustrates: ‘By Common Law, Carriers are insurers against every loss of property entrusted to their care, except losses arising from the Act of God, or the King’s enemies.’ Nowadays, insurance companies prefer not to rely on a term so broad as Act of God. Instead, policies have a list of specific exclusions that should make clear what’s insured and what’s not. If something happens to you that’s not excluded, and your claim meets all other policy terms and conditions, the insurer will pay out. It’s worthwhile to have a look at the policy and remind yourself of the exclusions. Or give your provider a call and ask them to take you through them.

Vis-Major Under Covid-19

The law of contracts is built around a fundamental norm that the parties must perform the contract. When a party fails to perform its part of the contract, the loss to the other party is made good. However, the law carves out exceptions when performance of the contract becomes impossible to the parties. A force majeure clause is one such exception that releases the party of its obligations to an extent when events beyond their control take place and leave them unable to perform their part of the contract.

FMC is a clause that is present in most commercial contracts and is a carefully drafted legal arrangement in the event of a crisis. When the clause is triggered, parties can decide to break from their obligations temporarily or permanently without necessarily breaching the contract. Companies in such situations use the clause as a safe exit route, sometimes in opportunistic ways, without having to incur the penalty of breaching the contract.

Generally, an “Act of God” is understood to include only natural unforeseen circumstances, whereas force majeure is wider in its ambit and includes both naturally occurring events and events that occur due to human intervention. However, both concepts elicit the same consequences in law.

In India as per Section 56 of the Indian Contract Act, 1872:

An agreement to do an act impossible in itself is void.
Contract to do act afterward becoming impossible or unlawful. –

A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

Compensation for loss through non-performance of act known to be impossible or unlawful; where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know, to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promisee sustains through the non-performance of the promise.

Conclusion

Vis-Major which refers to an act of god is something unseeable and predictable. It is something which is only in the hands of God. The incidents like flood, earthquake, tornado etc. whatever the loss is there to the person because of these incidents no one is actually liable for that. Therefore, whenever insurance is signed it is signed with the clause of “Act of God” because natural incidents are not in the hands of insurance company also. In India as per the Indian Contract Act, 1872 section 56 of the Contract Act an agreement to do an act impossible in itself is void. The agreement in this particular section explains, Agreements to do an unlawful act; Agreements to do an impossible act. In law of torts when a tort is committed, meaning that a defendant’s actions interfered with the plaintiff’s person or property, a plaintiff’s consent will excuse the defendant of the wrongdoing. Therefore, it is concluded that whenever there is Vis-Major none of the party is liable to pay for that particular incident.

Author -Jigna Mehta (Alumni of KES Shri Jayantilal H. Patel Law College)