Force Majeure lease provisions before and after the coronavirus (Covid-19)
Force Majeure is French for “superior force.” A Force Majeure (or Act of God) clause in a lease limits or eliminates liability for “an event or effect that can be neither anticipated nor controlled.” There is a tragic irony in the fact that a microscopic organism such as Covid-19 can trigger a lease clause that means “superior force.” But, for the time being at least, the novel coronavirus known as Covid-19 is a superior force – does it, however, trigger the force majeure clause in your lease, and thereby offer protection from liability to both landlords and tenants?
The answer is, of course, it depends. After the tragedy of 9-11, many leases were revised to include in their force majeure provisions acts of terror and similar language so that future acts of terror would fall under the force majeure protections against liability. Unfortunately, many force majeure clauses at that time did not specifically include phrases like acts of terror, and disputes arose over whether language like “acts of war” would be sufficient to trigger the force majeure protections. Since force majeure clauses are typically narrowly construed by the courts, the lack of a specific reference to acts of terror was sometimes dispositive against invoking the force majeure protections.
Similarly, with regard to Covid-19 and pandemic crises generally, many current leases do not include in their force majeure clause express references to pandemics or other health crises. Unlike the “act of war” language that was invoked after 9-11, in current leases there may not be any language for a court to “hang its hat on” by which it may enforce the force majeure clause. As a result, alleged defaults arising from things like building closures, quarantines and curfews may not enjoy force majeure protection (protections may, however, be found in other lease provisions).
Going forward, commercial leases should include in the parade of horribles found in force majeure clauses, language such as “health crises, including without limitation, epidemics, pandemics, and resulting quarantines, curfews and building closures.” Again, these clauses are narrowly construed, so this is not a guaranty of protection – remember that the definition not only speaks to matters that cannot be controlled, but also to matters that cannot be anticipated. At some point, it may be argued that certain damages flowing from a pandemic may no longer be said to be unanticipated. God forbid that we ever find ourselves in another pandemic crisis, but including such language in your force majeure clause going forward will provide courts with the contractual language necessary to enforce the force majeure protections where warranted, should such preventive medicine be needed.
