Force majeure is a legal term that refers to situations where unforeseen circumstances have occurred, preventing one or more parties from fulfilling their contractual obligations. A force majeure clause is a standard provision in many lease agreements that specifies the events that would allow either party to be excused from fulfilling their contractual obligations due to circumstances beyond their control. In this article, we will discuss the force majeure clause in a lease agreement and provide a sample clause that can be used in your lease agreement.
What is a force majeure clause?
A force majeure clause is a contractual provision that allows either party to be excused from fulfilling their contractual obligations due to certain unforeseeable events, such as acts of God, war, riots, strikes, or other similar events. This clause is designed to protect both parties from unforeseen circumstances that may make it impossible to fulfill their obligations under the lease agreement.
Why is a force majeure clause important?
A force majeure clause is important because it provides protection to both parties in the event that circumstances beyond their control arise. For example, if there is a natural disaster that destroys the leased property or makes it impossible to use the property for its intended purpose, the force majeure clause would allow either party to be excused from their obligations under the lease agreement. Without a force majeure clause, both parties would be exposed to the risk of breach of contract, which could result in legal disputes and financial penalties.
Sample force majeure clause for a lease agreement:
“The parties agree that neither party shall be liable for any delays or failures to perform any of its obligations due to circumstances beyond its reasonable control, such as strikes, lockouts, labor disputes, acts of God, war, terrorism, civil unrest, fire, flood, natural disaster, epidemic, pandemic, governmental actions, or any other cause beyond its reasonable control. In the event of such a delay or failure, the party affected shall promptly notify the other party in writing and take all reasonable steps to mitigate the effects of such delay or failure.”
A force majeure clause is an essential provision in a lease agreement that provides protection to both parties in the event of unforeseen circumstances beyond their control. This clause specifies the events that would allow either party to be excused from their contractual obligations. As a professional, it is important to ensure that the force majeure clause in your lease agreement is clear, concise, and comprehensive to avoid any legal disputes or financial penalties. The sample clause provided is just one example of what a force majeure clause can look like in a lease agreement, but it will provide a solid foundation for protecting both parties in case of any unforeseen circumstances.