In legal usage throughout the English-speaking world, an act of God is a natural hazard outside human control, such as an earthquake or tsunami, for which no person can be held responsible. An act of God may amount to an exception to liability in contracts (as under the Hague–Visby Rules) or it may be an “insured peril” in an insurance policy.
By contrast, other extraordinary man-made or political events are deemed force majeure.
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 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 exercise of reasonable prudence, diligence and care, or by the use of those means which the situation renders reasonable to employ.
UK – England and Wales
An act of God is an unforeseeable natural phenomenon. Explained by Lord Hobhouse in Transco plc v Stockport Metropolitan Borough Council as describing an event:
- which involves no human agency
- which is not realistically possible to guard against
- which is due directly and exclusively to natural causes and
- which could not have been prevented by any amount of foresight, plans, and care.
UK – Scotland
An act of God is described in Tennant v Earl of Glasgow (1864 2 M (HL) 22) as: “Circumstances which no human foresight can provide against, and of which human prudence is not bound to recognize the possibility, and which when they do occur, therefore, are calamities that do not involve the obligation of paying for the consequences that may result from them.”
In the law of torts, an act of God may be asserted as a type of intervening cause, the lack of which would have avoided the cause or diminished the result of liability (e.g., but for the earthquake, the old, poorly constructed building would be standing). However, foreseeable results of unforeseeable causes may still raise liability. For example, a bolt of lightning strikes a ship carrying volatile compressed gas, resulting in the expected explosion. Liability may be found if the carrier did not use reasonable care to protect against sparks—regardless of their origins. Similarly, strict liability could defeat a defense for an act of God where the defendant has created the conditions under which any accident would result in harm. For example, a long-haul truck driver takes a shortcut on a back road and the load is lost when the road is destroyed in an unforeseen flood. Other cases find that a common carrier is not liable for the unforeseeable forces of nature. See Memphis & Charlestown RR Co. v. Reeves, 77 U.S. 176 (1870).
A particularly interesting example is that of “rainmaker” Charles Hatfield, who was hired in 1915 by the city of San Diego to fill the Morena reservoir to capacity with rainwater for $10,000. The region was soon flooded by heavy rains, nearly bursting the reservoir’s dam, killing nearly 20 people, destroying 110 bridges (leaving 2), knocking out telephone and telegraph lines, and causing an estimated $3.5 million in damage in total. When the city refused to pay him (he had forgotten to sign the contract), he sued the city. The floods were ruled an act of God, excluding him from liability but also from payment.
The phrase “act of God” is sometimes used to attribute an event to divine intervention. Often it is used in conjunction with a natural disaster or tragic event. A miracle, by contrast, is often considered a fortuitous event attributed to divine intervention. Some consider it separate from acts of nature and being related to fate or destiny.
Christian theologians differ on their views and interpretations of scripture. R.C. Sproul implies that God causes a disaster when he speaks of divine providence: “In a universe governed by God, there are no chance events.” Others indicate that God may allow a tragedy to occur.
Others accept unfortunate events as part of life and reference Matthew 5:45 (KJV): “for he maketh his sun to rise on the evil and on the good, and sendeth rain on the just and on the unjust”.
- ^“Insurance: What exactly constitutes an “Act of God”?”. CBS News. 30 July 2015. Retrieved 7 July 2020.
- ^Black, Henry Campbell (1990). Black’s Law Dictionary (6th ed.). Saint Paul, Minnesota: West Publishing Co. p. 33. ISBN 0-314-76271-X.
- ^ IV (2) “Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from: … (d) Act of God”
- ^Marine Insurance Act 1906 – RULES FOR CONSTRUCTION OF POLICY
- ^such as the closure of the Shatt-al-Arab waterway – The Bamburi  I LLR3122
- ^“Beben nach Erdwärmeprojekt – Gericht spricht Schweizer Geologen frei”. 22 December 2009. Retrieved 28 November2012.
- ^Whitelaw, Claire; Robert Sanders (9 June 2008). “Javan mud volcano triggered by drilling, not quake”. Retrieved 22 February2011.
- ^Gordon D. Kaufman Vol. 61, No. 2 (Apr., 1968), pp. 175–201
- ^Starr, Samuel M. Tony; Roy, Alyssa B.; Leonard, Kaitlyn C.; Prober, Clare. “What the COVID-19 Pandemic Means for Force Majeure Provisions”. www.mintz.com. Retrieved 2020-03-31.
- ^“Introductory Session – Four Theories of Disaster”. FEMA Emergency Management Institute. Retrieved 30 December 2009.
- ^“Creation, Providence, and Miracle”. Retrieved 20 May 2014.
- ^Sproule, R C (1992). Essential Truths of the Christian Faith. Tyndale. pp. 61–63. ISBN 0-8423-2001-6.
- ^“act of God meaning”. Theidioms.com. Retrieved 30 December 2009.
- ^Strobel, Lee (July 2012), Why Does God Allow Tragedy and Suffering?, Church Leaders, retrieved 20 January 2013
- ^Robinson, B A (4 September 2005). “Why do tragedies happen?”. Ontario Consultants on Religious Tolerance. Retrieved 30 December 2009.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder TBIL.co STATX Fund.