Can COVID-19 PANDEMIC OR LOCKDOWN be the Excuse to the Businessmen as An Act Of God?

Can COVID-19 PANDEMIC OR LOCKDOWN be the Excuse to the Businessmen as An Act Of God?

Force Majeure/Act of God

An act of God is a phrase used to describe an event outside of human control, such as a natural disaster.

Force majeure is a French term meaning “superior force”. It is a common contractual clause that essentially negates the liability of a party when an extraordinary event or circumstance takes place beyond the control of the parties. The examples of the same can be war, riots, strikes, etc. Other than that there could be a natural phenomenon like earthquakes, hurricanes, floods, etc. which fall under the common bracket of ‘Act of God’. This clause prevents the parties from fulfilling their obligations under the contract.

Order 7 Rule 11(a) – Rejection of plaint where it does not disclose a cause of action.

As per Section 26 of the Code of Civil Procedure, 1908, every suit has to be instituted by the presentation of a plaint or in such other manner as may be prescribed. As per Black’s law dictionary, a plaint is a private memorial tendered in open court to the judge, where the party injured sets forth his cause of action.

A cause of action is a bundle of facts which are required to be proved for obtaining relief (Mayar (H.K.) Ltd. v. Owners & Parties, Vessel M.V. Fortune Express; (2006) 3 SCC 100). In other words, a bundle of facts, which is necessary for the plaintiff to prove in order to succeed in the suit (Bloom Dekor Ltd. v. Subhash Himatlal Desai and Ors.; (1994) 6 SCC 322).

In a generic and wide sense “cause of action” means every fact, which it is necessary to establish to support a right to obtain a judgment(Sadanandan Bhadran v. Madhavan Sunil Kumar; 1998 CriLJ 4066).

“cause of action” consists of a bundle of facts, which give cause to enforce the legal inquiry for redress in a court of law. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the plaintiff a right to claim relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action would possibly accrue or would arise (South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises Pvt. Ltd. and Ors.; 1996 (3) SCR 405).

In case, a plaint fails to disclose a cause of action, the plaint is liable to be rejected under Order VII Rule 11(c) of the Code of Civil Procedure, 1908. In the present movie, the Defendant took the said defence as no cause of action against the religious heads were made out on account of the earthquake being caused to the protagonist’s shop. However, the said defence was sort of rejected in the movie. As per us, it will be accepted in the real world.

EFFECT ON BUSINESSMEN 

Most of the businessmen are disturb because of this pandemic disease Covid-19 even the small vendors in a great shuffle in such there comes a law for those who have given or taken responsibility for the agreement for the supply of products or goods for a period of time or within the period of time. many are in the contract in which they have given their consent which can not be revoked until both the acceptor and proposer are agreed on a particular agreement. 

CONTRACT LAW

In the law of contracts, an act of God may be interpreted as an implied defense under the rule of impossibility or impracticability. If so, the promise is discharged because of unforeseen occurrences, which were unavoidable and would result in insurmountable delay, expense, or other material breach.

Under the English common law, contractual obligations were deemed sacrosanct, so failure to honour a contract could lead to an order for specific performance or internment in a debtor's prison. In 1863, this harsh rule was softened by the case of Taylor v Caldwell which introduced the doctrine of frustration of contract, which provided that "where a contract becomes impossible to perform and neither party is at fault, both parties may be excused their obligations". In this case, a music hall was burned down by act of God before a contract of hire could be fulfilled, and the court deemed the contract frustrated.

In other contracts, such as indemnification, an act of God may be no excuse, and in fact, may be the central risk assumed by the promisor—e.g., flood insurance or crop insurance—the only variables being the timing and extent of the damage. In many cases, failure by way of ignoring obvious risks due to "natural phenomena" will not be sufficient to excuse the performance of the obligation, even if the events are relatively rare: e.g., the year 2000 problem in computers. Under the Uniform Commercial Code, 2-615, failure to deliver goods sold may be excused by an "act of God" if the absence of such act was a "basic assumption" of the contract, and the act has made the delivery "commercially impracticable".

Recently, human activities have been claimed to be the root causes of some events previously considered natural disasters. In particular:

Geothermal injections of water provoking earthquakes (Basel, Switzerland, 2003)

Drilling provoking mud volcano (Java, 2008)

Such events are possibly threatening the legal status of acts of God and may establish liabilities where none existed until now. Another issue in the law of contracts is whether the terms of contracts be complied upon in the case of an epidemic.

As a general principle of act of God,epidemic can be classified as an act of God if the epidemic was unforeseeable and renders the promise discharged if the promisor cannot avoid the effect of the epidemic by the exercise of reasonable prudence, diligence, and care, or by the use of those means which the situation renders reasonable to employ.

TORT LAW

An act of God is an unforeseeable natural phenomenon.

1. which involves no human agency
2. which is not realistically possible to guard against
3. which is due directly and exclusively to natural causes and
4. which could not have been prevented by any amount of foresight, plans, and care.