While scientists try to explain whether the coronavirus is man-made or natural, we lay-people chew our nails anxiously as a new theory surfaces every day. As the world slowly starts resembling a Steven Spielberg film and we go around wearing masks and looking like Darth Vader, does the source of the disaster really matter? Actually, it does, at least in the legal world.
The law is pretty clear about Vis Major and Force Majeure, the first meaning “god-made”, while the second covers both man-made and god-made events.
Vis Major comes from the Latin for “Act of God”, while Force Majeure comes from the French for “Superior Force”. Historically, Vis Major dates back to an earlier time; in pre-modern times, man recognised all disasters as acts of god. It was only with the advent of industrialisation and modernisation, when manmade disasters became commonplace, that the need for a moniker covering such disasters was required.
A recent example of Force Majeure were the 2013 Kedarnath flash floods in 2013. While the torrential rains were definitely an act of god, the colossal devastation and landslides were caused by relentless construction in the hills. Many suggested that even the torrential rains were due to denuding of the forest cover and erosion in the mountains because of construction.
At the time, the National Green Tribunal rejected the GVK Group firm Alaknanda Hydro Power Company’s contention that the 2013 floods were an “act of god”, and directed it to pay a compensation of Rs 9.26 crore to those affected by the disaster. The company was held liable for lack of proper storage care at a construction project, as a result of which the material was swept away to Srinagar town in Pauri Garhwal and damaged a residential area.
The tribunal held, “An act of god provides no excuse unless it is so unexpected that no reasonable human foresight could be presumed to anticipate the occurrence, having regard to the conditions of time and place known to be prevailing....We, therefore, reject the plea of the respondent that the damage caused to the residential area was the result of ‘Act of God’.”
Here, Vis Major was not adequate to cover the disaster, while Force Majeure was. The latter legal definition thus came about to be broad enough to encompass disasters of all kinds.
‘Act of god’ and publishing
Strangely enough, neither of these expressions find mention in any of our Indian statutes, except for a brief mention of the term “Act of God” in two not-so-important laws: The Railways Act, 1989, and The Mines Act, 1952. In the Indian Contract Act, 1872, Section 56 talks about the concept of “Frustration” of Contract, which implies that owing to unpreventable circumstances, an act originally agreed to be done becomes impossible to carry out, thus rendering the original contract null and void.
The way I look at it, the “Frustration” mentioned above and the Doctrine of Force Majeure are two sides of the same coin. Both talk of unforeseen events rendering the execution of a contract impossible. Both protect the party unable to perform its part of the contract from having committed a breach.
From the publishing perspective, the question that arises is whether it is essential to insert a Force Majeure clause in a publishing contract. If such a clause is not mentioned in the contract, how would parties determine their obligations – or rather, the non-performance of their obligations – in the light of Covid-19,which falls under the wide definition of Force Majeure?
First, does a contract need to include a clause pertaining to Force Majeure?
Three scenarios for the author
There are three tests that should be remembered here:
Test 1: An event that gave rise to a party’s non-performance under the contract falls within the definition of Force Majeure within the contract.
Test 2: The event and the non-performance were due to circumstances beyond a party’s control.
Test 3: There were no reasonable steps that could have been taken to avoid or mitigate the event or its consequences.
Let us now apply these tests on publishing by imagining certain scenarios.
Let’s assume a Force Majeure clause exists in a publishing contract. An author was supposed to submit their manuscript on Day 30 of the lockdown. The publisher has already paid the author part of the advance, and the second instalment was to be paid immediately upon submission of the manuscript. But the author pleads Force Majeure as the reason for not being able to complete the manuscript. Would that plea hold water?
Now, if the author was unable to go out because of the lockdown, that can hardly be said to be a reason for being unable to deliver the manuscript. Let us add a twist. What if the author’s book was to be based on a series of interviews? Could the plea of Force Majeure then work? Again, as we see, there are multiple scenarios in the current context. At a time when even primary schoolchildren are attending virtual classes, what stopped the author from conducting online interviews?
Let me add another twist. What if the interviews were to be conducted with homeless people who have no means of giving online interviews? Can the author now enforce Force Majeure and be justified in doing so?
The answer is: Yes. Like the Courts say, whether or not an event can come within the ambit of Force Majeure has to be examined from case to case. Of course, for that to happen, there must be sufficient proof that the non-performance was beyond the party’s control and that no stone was left unturned to perform the obligation.
The publisher’s perspective
Let’s say that a publisher was supposed to publish the book by say Day 40 of the lockdown and run a promotional campaign with the Author involving a five-city book tour by, say, Day 60. Now due to the lockdown, the publisher is unable to do so. Reason: Force Majeure. Is this a valid justification? Yes, because the printing press has been shut down, and therefore the book cannot be published.
What if the book was already printed and had to be sent to the retailers, but the publisher says they cannot do so. Are they justified? Yes, if they can prove that the distribution channels, transport mechanism and bookshops were all shut during this period.
Another scenario: What if the contract was for an e-book? In such a case, Force Majeure cannot be applied.
Let’s come to book promotions. Indeed, no events could have been held during the lockdown, and no travel was possible at all. But what about online interviews and other promotions that didn’t involve travel or events? Did the publisher offer to do those?
If the answer is no, that means there were reasonable steps which could have been taken to fulfil such obligations, but weren’t undertaken. Now, if the publisher offered to take those reasonable steps but the author refused by insisting on the original methods of promotion, the publisher has fulfilled their obligations, and the author can make no claims.
Let’s move to contracts that do not mention Force Majeure. Many recent publishing contracts have been silent on Force Majeure. Although no one could have predicted the fallout of Covid-19, it’s strange that somewhere along the way, contracts have stopped mentioning Force Majeure and begun to repackage it as a simpler sounding but more general and rather ambiguous phrase, such as “unforeseen circumstances beyond one’s control”.
What happens in such contracts? Can they not claim protection against Force Majeure if the contracts are silent on this terminology? They absolutely can. In fact, by keeping themselves free of any terminology, they nicely fit into the ambit of the aforementioned Indian Contract Act.
A matter of intent
Finally, let us consider a contract which mentions neither Force Majeure nor “unforeseen circumstances”. What happens in such cases? Do they not come under prevailing laws? Of course they do.
Section 56 of the Contract Act, or Frustration of Contract, protects a party when it cannot carry out an obligation under any means. The Supreme Court has recognised Section 56 as having laid down the law relating to a party being freed of their contractual obligations by reasons of impossibility or illegality of the act agreed to be done. It has observed that the word “impossible” has not been used in the section in the sense of physical or literal impossibility.
Carrying out an act may not be literally impossible, but it may become impracticable and useless from the point of view of the object and purpose of the agreement. If an untoward event or change of circumstances topples the very foundation on which the parties signed the contract, it can very well be said that the promisor finds it impossible to undertake the act which they promised to do.
Those who find loopholes in contracts are sometimes the ones who do not want to carry out their obligations. But if both parties are in-sync with each other, why would there be a need for either to go to Court and cast aspersions of deliberate non-performance on the other?
In light of the Covid pandemic, the benefit of doubt should always be given to the one pleading an inability to perform, especially in an industry as creative and personal as publishing. Something that speaks volumes about the industry is that I cannot recall a recent instance in which an author has sued a publisher, and vice-versa, for breach of contract. That said, it would not hurt to insert a Force Majeure clause at the onset of any contract.
While every possible eventuality cannot be envisaged, clarity on the what-ifs will help in the long run. Besides, why get into the off-chance of either party even considering the option of litigation? It’s better hire a lawyer to keep you out of court than to defend you in one.
Regardless of how a contract is worded, it all boils down to intention in the end. Does the author truly intend to write? Or do they want to accept a better deal from another publisher and are using Covid as an excuse to get out of the existing contract? Similarly, does the publisher truly intend to publish? Or are they looking to get rid of the author as the book no longer seems as financially viable as a year ago?
If both parties have good intentions and clear consciences, there is no need to go to court at all. Both parties will understand and respect the other’s limitations. The publisher will understand the delay in the delivery of the manuscript and not demand the advance be returned, while the author will understand that the lavish promotions promised by the publisher earlier will no longer be possible post-lockdown, and they will have to make do with the alternatives. What’s important is clear communication between the two parties and a reassurance that, after the crisis, things will return to normal.
This series of articles on the impact of the coronavirus pandemic on publishing is curated by Kanishka Gupta.