Force Majeure Clause In Rental Agreement

Unless the force majeure clause is expressly required, the inability to ”use” the premises does not meet its requirements alone. ”Use” doesn`t just mean the ability to come and go. It also includes its use for hosting devices, servers, furniture, security personnel, etc. In addition, a rental agreement may require a party wishing to activate the force majeure clause to immediately inform the other party of the force majeure situation in writing. Even after notification and regardless of the likelihood of a court enforcing a decision of force majeure, each party is required to make reasonable efforts to mitigate the damage. There is no doubt that most landlords and tenants will be willing to be flexible rather than in costly quarrels, because we all want to adapt to this new environment. However, anyone wishing to avail themselves of the force majeure provisions in their agreement is encouraged to seek legal advice as soon as possible. Therefore, before relying on a force majeure clause to waive rent, tenants must first review their contracts and check whether they have the power to forego or suspend rent. In the absence of clarity on the part of the government and in the face of the blockade of the pandemic in economic distress, tenants across the country have assessed in detail the force majeure clause as part of their respective agreements. If a contract is governed by Pennsylvania law, remember that Pennsylvania courts restrictively establish force majeure clauses.

It is therefore preferable to list more events in the determination of force majeure. The more events listed, the more likely a court is to apply the language of force majeure to your stated situation. Although the absence of a force majeure clause does not prohibit you from using other defences to enforce the treaty (for example. B ”impossibility” or ”frustration”), other defences cannot excuse performance, as can a force majeure clause. Under the COVID 19 pandemic, commercial landlords and tenants are now in uncharted territory and face the total or partial closure of the business due to government restrictions and preventive measures of social abandonment. The duration of this interruption is still uncertain, so landlords and tenants are working to assess the damage and develop strategies to determine whether and how they can enforce their rights. In these times of uncertainty, commercial landlords and tenants should carefully verify their leases and, if necessary, seek legal assistance to determine their rights and obligations. 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. The force majeure usually consists of including events outside the proper control of the party and therefore does not cover- Even in case of force majeure, commercial tenants will likely 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. However, in practical life, most force majeure clauses do not excuse the total non-compliance of a party; suspend them only for the period of force majeure.

Julkaisu on kategorioissa Yleinen. Bookmark the permalink.

Comments are closed.