Force majeure (“strong force” in French) is a contractual clause relieving one or both parties of obligations because of circumstances beyond their control. It’s lately become a hot topic in real estate.
The doctrine may be invoked by tenants (primarily commercial) who are having difficulty coming up with rent, landlords who could not perform a service during the force majeure event, or contractors or vendors to justify project delays. While it’s too early to assess how courts will view such claims connected to the pandemic, legal experts offer insights about how such provisions may be presented in contracts and whether pursuing claims makes sense.
- Pay attention to the wording and facts in an agreement to consider whether a force majeure claim seems viable.
- Then, check to see if the clause specifies circumstances such as “epidemic,” “pandemic,” “quarantine,” “acts of government,” or general language such as “any cause whether similar or dissimilar to the foregoing.”
- Attempt to settle disputes out of court. Courts are likely to be backed up for a long time with criminal and other matters of greater urgency.
- If you do pursue a court case, don’t assume a decision in one state will bolster (or weaken) your claim. States may interpret a similar set of facts differently. Force majeure is very specific to the contract at hand, which influences courts, even within state.
Sources: Law360.com; Charlie Lee, NAR