Sample Force Majeure Clause In Rental Agreement

To rely on a force majeure clause, you must prove that you have taken all appropriate measures to avoid or reduce the damage caused by the force majeure event. One of the ways commercial landlords and tenants can try to protect themselves is to be wary of “force majeure” clauses in their lease agreements. A force majeure clause is a contractual provision that deals with exceptional events that are beyond the control of the parties. These clauses generally provide that, to the extent that the event of force majeure renders the service impracticable, economically inapplicable, illegal or impossible or results in a delay in the performance, the obligations of the party concerned with regard to the performance of a rental contract may be temporarily suspended or fully excused. To be able to rely on the force majeure clause, COVID-19 must have affected your ability to fulfill your obligations under the rental agreement. Check the wording of the force majeure clause again to determine the extent of the disruption required to rely on the clause. Terms such as “delayed or disabled,” “limited,” “unfit,” or “prevented” indicate how troublesome COVID-19 must be. Clearly, “delayed or disabled” is a lower threshold than “avoided” or “incapacitated.” In the first case, a party wishing to apply for a facility may simply be required to demonstrate that COVID-19 has reduced its cash flow and has therefore “delayed or impeded” the payment of rent. In the latter case, a party may be required to demonstrate that COVID-19 has reduced its overall cash flow and that despite efforts to find alternative sources of income, it is directly “prevented” from paying the rent. Check the leases. Every rental agreement is different and landlords and tenants should carefully check the specific language of force majeure clauses, the right to rent reduction, go dark provisions and other provisions that may apply in these difficult times. A force majeure clause (in English for “a superior force”) is a contractual provision that exempts the parties from the liability of a contract, since a force that is not controlled by one of the parties prevents the performance of the obligations of the parties.

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