Breach of Contract Claims for Commercial Landlords & Businesses During COVID-19: Will Force Majeure Be of Help?
Breach of Contract Claims for Commercial Landlords & Businesses During COVID-19: Will Force Majeure Be of Help? Mar 21, 2020 One issue that has already come up in a number of contexts due to the coronavirus pandemic, including when it comes to business and landlord-tenant breach of contract claims, is the force majeure clause, or the provision in contracts which excuses non-performance of some contract obligations if certain unforeseeable events occur which makes fulfilling these obligations impossible (usually known as “acts of God”). Historically, these clauses have included earthquakes, floods, hurricanes, and sometimes also labor disputes, strikes, wars, etc. However, some commercial tenants are now arguing that COVID-19 constitutes a “force majeure” event that makes fulfilling their rent obligations impossible, while many businesses have been and continue to argue that they cannot fulfill their contract obligations due to COVID-19 creating extraordinary and unforeseeable events. These events and circumstances include workers unable to show up for work, having to close down facilities, states mandating social distancing, supply chains abroad shutting down, etc. There is no question that the courts will be filled with these disputes once that they are up and running again. What Force Majeure Clauses Actually Provide For However, it is important to note that, while courts will always first look to the clause itself in the contract to determine what, specifically, the parties agreed to, most of the time, these clauses are boilerplate provisions that are given very little attention and time during the drafting of the contract, and rarely do they specifically mention pandemics. In addition, the courts are hesitant to allow for force majeure to excuse contract obligations due to changing economic conditions and hardships. This arguably leaves these disputes in a similar position that many businesses are in with insurance companies regarding business interruption insurance and the pandemic, with insurance companies arguing that business interruption insurance does not cover business losses due to COVID-19 and commercial landlords arguing that commercial leases do not provide for nonpayment of rent due to financial hardship caused by a pandemic. Providing Notice In addition, when invoking a force majeure clause, a party has to provide notice to the other party (to the extent that it is possible) so that that party has the option of modifying their order, accepting delay, or terminating the contract and going elsewhere; a procedure which has been difficult to follow through with during COVID-19, as everything, including shutdowns and mandatory social distancing, has been proceeding very quickly and not always with notice. Contact Our Breach of Contract Attorneys to Find Out About Florida While Florida Governor Ron DeSantis did enter a moratorium on evicting tenants for 45 days from April 2 and the Florida Supreme Court suspended clerks from issuing writs of possession through May 29, DeSantis’ measure only applies to residential tenants, not commercial tenants. Still, with court closures, commercial landlords may have difficulty with enforcement, as will businesses that have concerns about breach of contract issues that they cannot yet litigate due to closures. However, you do have some options available to you during this time – Contact our Tampa breach of contract attorneys at HD Law Partners today to find out more about what those are. Resource: flgov.com/wp-content/uploads/orders/2020/EO_20-94.pdf floridasupremecourt.org/content/download/633282/7195631/AOSC20-23.pdf reuters.com/article/us-health-coronavirus-livestock-insight-idUSKCN2292YS https://www.hdlawpartners.com/mcdonalds-wins-largest-adjudicated-case-in-the-history-of-national-labor-relations-board-sets-precedent-for-franchise-business-model/ Posted in Business Corporate | No Comments » Connect with us Archives May 2026 April 2026 March 2026 February 2026 January 2026 December 2025 November 2025 October 2025 September 2025 July 2025 June 2025 January 2025 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 May 2022 April 2022 March 2022 November 2021 October 2021 September 2021 August 2021 July 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 November 13 Categories Alimony Appellate Arbitration Auto Accidents Auto Insurance Business Corporate Business Insurance Law Child Custody Child Support Criminal Law Divorce Family Law FEMA Insurance Payments Florida’s Mandatory 2‑Hour Legal Professionalism CLE: Foreclosure Defense Fort Myers Hurricane Insurance Attorney General Guardianship HD Law Partners Service HOA/Property Management Homeowners Association Homeowners Insurance Hurricane Claims Hurricane Insurance Insurance Bad Faith Insurance Claims Insurance Defense Insurance Litigation Landlord Tenant Law Enforcement Liability Loan Modifications Mold Water Damage Parental Rights Paternity Personal Injury Premises Liability Law Prenuptial Agreements Private Security Property Distribution Property Owner Law Sarasota Insurance Litigation Attorney Slip Fall Tampa Business and Corporate Attorneys tampa family attorney Tampa Insurance Attorneys Timeshare Timesharing Uncategorized HD Law Partners is proud to be your trusted full-service law firm Quick Links Property & Casualty Business & Corporate Litigation Family Law Contact Us Careers Get In Touch 2002 North Lois Avenue Suite 510 Tampa, FL 33607 813-253-5333 Contact Us