Force Majeure Clauses in Commercial Leases – Lawyers’ Interpretation

Force majeure clauses in Commercial leases have become a focal point for legal interpretation, particularly in light of recent global events that have disrupted businesses on an unprecedented scale. These clauses, often considered boilerplate provisions, are designed to allocate risk between parties in the event of unforeseen circumstances that render performance under the lease impossible or impracticable. However, the interpretation of force majeure clauses can vary significantly depending on the specific language used in the lease agreement and the jurisdiction’s laws governing contract interpretation. Lawyers scrutinize force majeure clauses to determine their scope and applicability to the circumstances at hand. One key consideration is whether the language explicitly includes pandemics, government orders, or other events that may disrupt business operations. In some cases, force majeure clauses may list specific events such as natural disasters, acts of terrorism, or labor strikes, while others may include more general language such as acts of God or events beyond the reasonable control of the parties.

Interpretation also hinges on whether the triggering event must directly prevent performance or merely make it more difficult or economically burdensome. Courts may examine the foreseeability of the event and whether the party seeking to invoke the clause took reasonable steps to mitigate its impact. Additionally, the timing of the event in relation to the lease agreement’s execution may influence its interpretation; for example, events that were foreseeable at the time of contracting may not qualify as force majeure. The burden of proof typically falls on the party seeking to rely on the force majeure clause to demonstrate that the event meets the criteria outlined in the lease agreement. This may involve providing evidence of government orders, public health advisories, or other factors that directly affect the ability to operate the Commercial space.

Lawyers may also analyze whether alternative means of performance were feasible or if the party seeking relief acted in bad faith. In the context of Commercial leases, the interpretation of force majeure clauses can have significant implications for both property owners and tenants. Property owners may seek to enforce lease obligations despite disruptions, while tenants may argue for relief from rent payments or other contractual obligations during periods of forced closure or reduced foot traffic. Negotiating force majeure provisions that adequately address the risks and uncertainties facing both parties can help mitigate disputes and provide clarity in times of crisis. Some property owners and tenants have turned to alternative dispute resolution mechanisms such as mediation or arbitration to resolve conflicts arising from force majeure disputes. Ultimately, the interpretation of force majeure clauses in commercial lease lawyer requires a nuanced understanding of contract law principles and a careful analysis of the specific language and context in each case.