Coronavirus: an Act of Human or an Act of God?

Author-Tejas Sharma, Amity Law School, Noida

 

INTRODUCTION

The new corona virus infection began in Wuhan, China and has spread everywhere throughout the world. A very large number of individuals have been infected and died because of this dangerous infection. After calculating the total number of deaths caused, the World Health Organisation (WHO 1948) declared the new corona virus as a “global pandemic” in the month of March, 2020.

China’s actions after the spread of the virus, helped Wuhan residents to get to their normal life. China imposed a lockdown for seventy six days in Wuhan and recently, Wuhan discharged it’s last patient.

In any case, the spread of the global pandemic has changed the social and financial situation of this cutting edge world. Around 200 nations have been infected by this virus, from New York to Islamabad, states are securing urban communities to check the spread of the lethal infection, yet at the same time people are dumbfounded by what is befalling them.

The world had never seen a situation like this since the 1918 flu pandemic, also known as the Spanish flu. The first case of Spanish flu was reported in spring of the year 1918 and it lasted almost one year as it’s last case was reported in spring season in 1919.

Since it’s first case, this pandemic has caused immense degradation of the economic situation around the world. Even superpowers like USA are struggling to declare a lockdown because completely sealing off of the country will lead to further economic downfall. Due to this pandemic, a lot of people around the globe are facing unemployment and some are unable to execute their contracts with other parties. They all are confused, whether this pandemic an act of god or not.

The hospitality and travel sectors are among the worst affected industries. While the central bank and the government have taken a host of measures to boost liquidity, provide moratorium on loans and ease compliance, these are like to only aid a recovery and not help recover loss.[1]

Now, firstly, people have to find out what all falls under the purview of Act of God. These instances, likewise called “Force Majeure” provisos, identify with occasions outside human control, similar to streak floods, quakes, or other catastrophic events. For most part, these instances include killing or breaking point risk for wounds or different misfortunes coming about because of such occasions.

Insurance agencies once normally utilized the term “act of God” to depict cataclysmic events outside human ability to control. The term is infrequently found in protection arrangements related to legal contracts but today, it’s also used in day to day normal language.

Furthermore, regardless of whether the corona virus (COVID-19) is viewed as an act of God is top of psyche for entrepreneurs all over. The COVID-19 pandemic is unquestionably considered a worldwide debacle, yet whether it qualifies as act of God is far from being obviously true.

An “act of God” by and large depicts an occasion that can’t be anticipated or forestalled with sensible consideration. In the life insurance business, acts of God are outside of human control. Since the term “act of God” is regularly hazy, most life insurance suppliers no longer remember that wording for approaches. To stay away from disarray, numerous life insurance providers’ arrangements basically list explicit cataclysmic events that are secured or barred. Some people believe that this virus is actually man-made as it was leaked from a laboratory in Wuhan, China. While there are some who believe that the virus came from a bat.

Whether the nature of this virus is man-made or not, this infection and its effect would change the fate of our reality, in coming days its sway on worldwide economy and security would be seen in various manners. This infection has many shrouded exercises which will reveal themselves in coming days.

This global spread of this virus messed up the economic condition of every country in the world. The post-lockdown world will face a major economic crisis and people will have to experience unemployment on a large scale.

Now, due to lack of the case laws related to defence of act of god during a pandemic, there are actually mixed opinions on whether a pandemic falls under the blanket of act of god.

India’s lockdown to contain the new corona virus outbreak has brought businesses across the nation to a halt, causing losses. While companies do buy insurance to protect themselves against business interruption, according to insurers such policies don’t cover a pandemic like Covid-19.

The parties whose contractual performance would have been hindered by the corona virus pandemic will invoke act of God as a contractual or common-law defence, reasoning that an unknown and unexpected natural phenomenon occurred such that their non-performance of a contractual obligation should be excused.[2]

So basically in contract law, to figure out whether a pandemic or this virus outbreak falls under the act of god will depend on the term and conditions of the contract formed. To consider something as a act of god, it needs to be natural and something which human being cannot control.

Recently, The United States of America made a statement that this virus is actually man made and had asked China to provide monetary compensation. Several countries other than USA are also blaming China for the spread of this virus and also for the spread of miss-information. However, there is absolutely no evidence that this is actually man made.

Also, due to the large scale destruction around the globe, life insurance companies aren’t recognising this pandemic under the act of god. The growing hatred towards china due to this virus spread is not settling at the moment. The scientists all over the globe are trying really hard to come up with a vaccine. Recently, Italy claimed that the vaccine is ready and will supply it to other countries as soon as possible. Well, whatever will be the outcome, let us all stay positive and just hope this all ends soon and people may return to their normal routines.

[1]Forum Bhatt, Why companies can’t claim insurance for COVID-19 losses,April 08, 2020, Bloombergquint.com,https://bit.ly/2YLgOkj

[2]Amanda M. Waide, Christina Hull Eikhoff, Litigation advisory: Is the COVID-19 outbreak an “act of god”? Why it may matter for your contracts, March 25, 2020, Alston & Bird, https://bit.ly/3fsSrhd

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