Force Majeure Clause

How a force majeure clause works in a lease

A lease is a contract and a conveyance at once, and the two halves answer disruption differently. The property-law tradition made rent absolute: a tenant remained liable even if the building burned, which is why casualty, condemnation, and abatement clauses exist as negotiated exceptions. Force majeure is the contract-law overlay: a defined event that suspends obligations that performance-based — landlord duties to deliver, construct, maintain, and provide services; tenant duties to operate, open for business, or complete work by a date. Because most US jurisdictions have no free-standing force majeure doctrine for real estate leases, everything comes from the drafting: the enumerated events, the standard of interference, and the relief granted.

Three drafting elements decide the clause’s real reach. First, the event list: natural disasters, fire, war and terrorism, labor disputes (usually qualified to exclude the affected party’s own workforce), governmental action or orders, utility interruptions, and — since 2020 — epidemics and pandemics as an expressly named category or an express exclusion. Courts read catch-all language like “any cause beyond the party’s reasonable control” narrowly, generally confining it to events of the same kind as those enumerated, so an unforeseen disruption that matches nothing on the list may win no relief no matter how genuinely out of the party’s control it was. Second, the interference standard: “prevented” or “rendered impossible” is a high bar that economic hardship cannot clear — a restaurant shut by an order can usually still pay rent, and “I lost my revenue” is not “I cannot perform.” Softer “materially delayed or hindered” formulations give relief more often. Third, the carve-out sentence: the standard landlord form ends with “nothing herein shall excuse a tenant from the payment of rent and other monetary obligations,” and that single clause re-allocates the entire catastrophic-event risk back onto the tenant.

Force majeure also does silent arithmetic. Most clauses suspend or extend periods — cure periods, landlord construction timelines, delivery dates — rather than ending them. A lease that tolls all notice deadlines during a force majeure event will quietly move the tenant’s renewal, expansion, and break-right windows along with everything else, which is exactly when calendaring discipline breaks down. And where landlord-side delay relief runs long, negotiated outside dates matter: leases that let the tenant terminate (or abate rent) if a force majeure delay to delivery or renovation exceeds, say, 90 or 180 days convert open-ended suspension into a bounded risk.

The clause is also a sibling in a remedial family, and abstracts routinely merge the four. Casualty clauses respond to physical damage; condemnation clauses to taking by authority; co-tenancy, go-dark, and kick-out provisions to business disruption with rent-side consequences; and force majeure to the event category that suspends performance without necessarily touching money. A lease may route the same hurricane through two or three of these clauses at once — damage abatement under casualty, timeline relief under force majeure — and only the drafting says how they interact.

Worked example: closure orders and the monetary carve-out

Take a 2,400 SF restaurant in a multi-tenant retail center at $42 per rentable square foot per year — about $8,400 a month in base rent plus pro-rata recoveries — with a continuous-operation covenant and a co-tenancy clause keyed to two named anchors. A government order of general applicability closes indoor dining for 14 weeks. Which way the money falls is entirely clause-drafting.

Under the landlord form — force majeure events suspending “obligations of the parties other than monetary obligations,” epidemic not enumerated but the catch-all arguably reaching the order — the closure event is covered for the landlord’s services duties and the tenant’s operations covenant (no default for going dark while ordered closed), yet the rent stream is untouched: roughly $29,400 of base rent over 14 weeks remains payable, and only the lease’s separate co-tenancy or percentage-rent mechanics (if the closures shut an anchor past the stated trigger) give any rent-side relief. This is the outcome most litigated pandemic rent cases reached: a carve-out sentence enforced as written.

Now the tenant-negotiated drafting: “if premises use is suspended by an order of general applicability for more than 30 consecutive days, base rent shall abate proportionally for the suspension period, and the operations covenant is suspended while the order is in effect.” Same event, same building — 14 weeks of abatement worth about $29,400 relief plus recoveries adjustments, and the operations covenant cannot be used as a default hook. The delta is not the definition of the event; it is the two sentences of monetary relief. On the landlord’s side of the ledger, that ask is usually traded: broader enumerated events or longer timeline relief in exchange for rent remaining due.

Negotiating asks and abstraction traps

The tenant asks that matter most: monetary relief expressly tied to a closure-order or casualty-style trigger rather than a naked carve-out; “epidemic/pandemic” and “orders of general applicability” named in the list (silence after 2020 reads as refusal); the interference standard set at “prevented or materially delayed,” not impossibility; notice and mitigation duties with a defined window (typically written notice within 10–30 days) so the defense is not forfeited procedurally; symmetrical application — if the clause only lists labor, materials, and governmental permitting (landlord construction concerns), it is a landlord clause wearing a neutral name; and outside dates on any suspension: beyond 90–180 days the tenant terminates, or rent abates, rather than waiting indefinitely.

For the abstract, the trap is recording “force majeure: yes” as a checkbox. The extractable facts are which party is protected; the enumerated events and how far the catch-all reaches; whether monetary obligations are excluded; the notice requirement and any cure-style deadline for invoking it; which periods are tolled — cure periods, operations, and crucially the notice windows for renewal, expansion, and break rights; the outside date and what happens at it (termination right, abatement, or nothing); and the sequencing against casualty, condemnation, co-tenancy, and insurance clauses that respond to the same physical events. An abstract that captures none of that will show protection where the carve-out sentence gives the tenant none.

Two more drafting-level traps recur. First, “financial hardship is not force majeure”: courts consistently hold that a collapse in customer traffic or revenue — where performance remains possible, merely unprofitable — does not invoke the clause unless the drafting says otherwise, so tenants wanting business-interruption relief need it written as a rent-abatement or kick-out mechanism, not as a force majeure theory. Second, tolling without a calendar: a lease that suspends all deadlines “for the duration of the event” moves contractual dates without notice to anyone; if the tenant’s break-right notice window was mid-event, the deadline may have shifted invisibly.