Other than breach of contract, a case for criminal negligence can also be made out in such a situation
An ‘Act of God’, force majeure in legal parlance, is a term for forces that impact the performance of a contract and which are beyond the control of the contracting parties. For instance, a natural calamity.
Legal experts note that contracts awarded by the government generally have a provision that a contractor’s obligations and liabilities are suspended during such events, so named. “The actual meaning of the term depends on the way it is defined in the contract, and generally includes all events beyond the control of the parties, such as earthquakes, floods, wars, strikes, etc,” says Aakanksha Joshi, associate partner, Economic Laws Practice.
Invoking of this clause also limits the liabilities and claims on the contracting parties. “If an entity is able to establish that it was unable to comply with the terms of the contract by reason of an Act of God, it cannot be held liable for breach of the contract,” adds Joshi.
However, in the case of the collapse of the under-construction bridge in Kolkata, this might not apply. “This is not an ‘Act of God’ by any stretch of imagination. There has been no such event in Kolkata that could have occasioned such a collapse,” says Ramesh Vaidyanathan, managing partner, Advaya Legal.
Other than breach of contract, a case for criminal negligence can also be made out in such a situation. “Apart from the builder, all those who approved the bills of the builder for the work should be held accountable, if there has been negligence at any level. The victims or families can also sue the builder and the government or the municipality for compensation,” he adds.
According to the Indian Contract Act, a contractor in such a situation would be liable for contractual damages. For criminal negligence resulting in death, under the Indian Penal Code, the punishment could be a fine or a jail term of up to two years.
The contractor could also be booked under the Public Liability Insurance Act. This fixes liabilities on persons controlling hazardous substances that result in an accident, up to specified amounts.
Legal experts say the managing director and chief executive officer are also liable for any misfeasance of the company in question.