Sample Force Majeure Clause In Tenancy Agreement

By Mark, December 16, 2020

“Force majeure” is French for superior violence. This is just an unusual (and confusing) name for a standard clause (disposition) that is often included in contracts, such as commercial leases.B. It is generally more difficult to avoid liability in the event of a breach of contract according to the doctrine of frustration than if your agreement has a well written clause on force majeure. However, depending on the circumstances, the coronavirus pandemic may fall within this doctrine. But it is advisable to get legal advice before counting on it. Force majeure clauses are also called “Act of God” clauses. You can excuse people or companies that make contracts to do what they promised, such as paying rent. Alternatively, the following non-monetary lease bonds may be excused by force majeure events: rental clauses (which allow you to reduce your rent when large tenants or a number of tenants leave a retail area), “go-dark” clauses (which allow you to stop operations in your premises while continuing to pay rent) and requirements in operating hours. 2. What is a force majeure and consequences clause? To invoke the force majeure clause, COVID-19 must have compromised your ability to meet your obligations under the lease. Check the wording of the force majeure clause to determine the extent of the disturbance required to invoke the clause. Concepts such as “delayed or disabled,” “restricted,” “incapacity” or “prevented” indicate how troublesome COVID-19 must be. It is clear that “delay or handicap” is a lower threshold compared to “prevention” or “disability.” In the first case, a party requesting discharge can simply prove that COVID-19 reduced its cash flow and therefore “delayed or impeded” the payment of the rent; in the latter case, a party may have to prove that COVID-19 has reduced its total cash flow and that, despite efforts to find other sources of income, it is totally “prevented” from paying rent.

Even in the event of a force majeure, commercial tenants will probably have to pay rent. Commercial leases generally require rent and other monetary obligations as excusable obligations. It can also find that the tenant`s tenancy obligation is independent of the lessor`s obligations in the tenancy agreement. If your contract contains a force majeure clause, read this clause carefully. When a clause in the contract or lease explicitly lists “epidemics and/or pandemics” as a force majeure event, it is more likely that a court will realize that COVID-19 is a force majeure event because the World Health Organization, the federal government and many federal governments have declared covid-19 to be a health emergency. If your contract contains a force majeure clause and you intend to use it to delay or suspend the service, inform your customers, your landlord, another person or a business. Otherwise, you may waive your right to rely on a force majeure clause. This depends on whether the tenancy agreement consists of a force majeure clause allowing a tenant to reduce the rent if the tenant does not make the premises reasonably accessible or cannot use them.