Commercial landlords and tenants face unprecedented challenges caused by the COVID-19 pandemic. The impact has been most acute to businesses deemed “nonessential.” Shuttered by government “safer at home” directives since mid-March, many cannot afford to pay the rent. The specter of mounting lease defaults is forcing an examination of arcane lease provisions such as force majeure, bringing fresh attention to legal principles often overlooked in a robust economy. Saddled with a large backlog of cases, courts are unlikely to address these claims anytime soon. Given the difficulty of predicting how force majeure clauses will be interpreted, considering the breadth of the health care emergency, both landlords and tenants may be motivated to negotiate a re-structuring of their respective lease obligations.

Force Majeure