Acts of God

In legal usage throughout the English–speaking world, an Act of God is a natural disaster 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".

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