If 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 find that COVID-19 is a force majeure event, given that the World Health Organization, the federal government, and many governments have declared COVID-19 a public emergency. Even in cases of force majeure, commercial tenants should have to pay rent. Typically, commercial hire-purchase agreements relieve the obligation to pay rent and other financial obligations from excusable obligations. It may also be stated that the obligation for the tenant to pay the rent is independent of the lessor`s obligations in the rental agreement. “The pandemic has shown how dependent landlords and tenants are on one another,” said Judith Bachman, a New York- based real estate attorney who has negotiated several retail leases since the pandemic began. Williamsburg Climbing Gym Co. LLC and Fifth Concerto Holdco, Inc. v. Ronit Realty LLC, No. 1:20-cv-02073 (E.D.N.Y. Courts will interpret force majeure clauses in contracts in different ways, depending on the language of the clause and the law of a particular jurisdiction. However, in theory, the fundamental purpose of force majeure clauses is to exempt part of its contractual obligations when its performance has been prevented by a force beyond its control or if the object of the contract has been thwarted.

A force majeure clause can often list a number of events such as earthquakes, storms, floods, natural disasters, wars or other “force majeure events” agreed upon by the parties as excuses for their non-performance. If a contract is governed by Pennsylvania law, remember that Pennsylvania courts establish force majeure clauses. It is therefore preferable to list more events in the force majeure provision. The more events are listed, the more likely it is that a court will apply the language of force majeure to your situation. Although the absence of a force majeure clause does not prevent you from using other objections to enforce the treaty (e.g. B”impossibility” or “frustration of purpose”), other defenses cannot excuse performance, as a force majeure clause can. The COVID-19 pandemic has led to the shutdown of activities across the country. Business owners have not been able to generate revenue and some have been forced to close their doors forever.

Business owners may wonder what the rights or liabilities of certain contracts such as leases, service contracts and supplier contracts are. . . .