What Force Majeure Actually Means in a Commercial Lease
Force majeure—French for "superior force"—is a contractual provision that excuses one or both parties from performing their obligations when extraordinary events beyond their control make performance impossible or impracticable. In commercial leases, these clauses have historically focused on construction delays, natural disasters, and acts of war.
The critical distinction that caught tenants off guard during COVID: force majeure clauses in commercial leases almost universally applied only to non-monetary obligations. Even when a pandemic was theoretically covered, tenants were still on the hook for rent. The clause might excuse a landlord from completing a build-out on time, or excuse a tenant from opening by a specific date, but the obligation to pay rent remained untouched.
This is not an accident. Landlords and their attorneys have spent decades refining lease language to ensure that rent obligations survive virtually any disruption. Understanding this asymmetry is the starting point for any meaningful negotiation.
In most U.S. jurisdictions, force majeure is a contractual defense, not a statutory one. If the clause does not explicitly list the triggering event (such as "pandemic" or "government shutdown order"), courts will typically refuse to apply it. The lesson: vague language like "acts of God" was almost never enough to cover COVID.
Why Most Tenants Lost Their COVID Force Majeure Arguments
Between 2020 and 2024, hundreds of commercial tenants across the United States attempted to invoke force majeure clauses to avoid or reduce rent obligations. The results were overwhelmingly unfavorable. Courts consistently ruled against tenants for several recurring reasons.
1. Pandemics Were Not Listed as Triggering Events
The single most common reason tenants lost was simple: their force majeure clause did not mention pandemics, epidemics, or government shutdown orders. Courts in New York, California, Illinois, and Texas all held that standard force majeure language covering "natural disasters," "acts of God," or "events beyond the parties' control" did not encompass a pandemic. The principle of ejusdem generis—that general terms following specific ones are limited to the same category—meant that a list of physical disasters did not extend to a health crisis.
2. Rent Was Excluded from Force Majeure Relief
Even in leases where the force majeure clause was arguably broad enough to cover a pandemic, courts pointed to carve-outs that explicitly excluded monetary obligations. Language like "this provision shall not apply to Tenant's obligation to pay Rent or any other charges due under this Lease" appeared in the vast majority of commercial leases—and courts enforced it literally.
3. Performance Was Difficult, Not Impossible
Courts drew a hard line between impracticability and impossibility. A restaurant tenant whose dine-in business was shut down by government order could still, in the court's view, pay rent from savings, loans, or pivoting to takeout. The fact that paying rent became financially devastating did not meet the legal threshold of impossibility in most jurisdictions.
4. Tenants Failed to Follow Notice Requirements
Many force majeure clauses require the affected party to provide written notice within a specific timeframe (often 5 to 15 days of the triggering event). In the chaos of early 2020, numerous tenants simply stopped paying rent without sending formal force majeure notices. Courts treated this procedural failure as a waiver of the defense entirely.
In one of the most closely watched COVID lease cases, the court ruled that Gap could not invoke force majeure to avoid paying rent at its Times Square flagship location, despite government-ordered closures. The court found that the lease's force majeure clause explicitly excluded rent obligations, and that the pandemic did not render payment "impossible"—merely more burdensome. Gap ultimately settled for a renegotiated lease at significantly reduced terms, but only after costly litigation.
Force Majeure vs. Related Legal Doctrines
Tenants who could not rely on force majeure often turned to alternative legal theories. Understanding these distinctions is essential for drafting comprehensive lease protections.
| Doctrine | Standard | COVID Success Rate | Best Used When |
|---|---|---|---|
| Force Majeure | Event must be listed in the clause; performance must be impossible | ~15–20% | The lease explicitly lists the triggering event and covers rent |
| Frustration of Purpose | The principal purpose of the contract is substantially frustrated | ~25–30% | Government orders directly prevent the intended use of the premises |
| Impossibility | Performance is objectively impossible (not merely difficult) | ~10% | The premises are physically inaccessible or legally prohibited from use |
| Impracticability | Performance is possible but would impose extreme and unreasonable cost | ~12–15% | Compliance would require costs far exceeding the contract value |
Frustration of purpose proved to be the most successful alternative theory for tenants during COVID, particularly for retail tenants whose locations were subject to mandatory closure orders. Courts in New York and California recognized that when a government order eliminated the very reason a tenant leased the space (e.g., operating a sit-down restaurant), the purpose of the lease was frustrated even if paying rent remained technically possible.
However, even frustration of purpose claims succeeded only partially. Courts generally granted rent reductions or temporary abatements rather than full lease termination, and success depended heavily on whether the lease contained a specific "permitted use" clause that was directly impacted by government orders.
How to Draft Modern Force Majeure Clauses That Actually Protect You
The post-COVID landscape has fundamentally changed lease negotiation. Sophisticated tenants now insist on force majeure provisions that address the specific gaps exposed by the pandemic. Here is what a strong, tenant-protective force majeure clause should include.
Explicit Triggering Events
Your force majeure clause must specifically enumerate the events that trigger relief. Vague catch-all language is not sufficient. At minimum, the list should include:
- Pandemic, epidemic, or public health emergency (declared by federal, state, or local authorities or the WHO)
- Government shutdown orders, stay-at-home orders, or capacity restrictions affecting the tenant's use of the premises
- Quarantine requirements affecting the tenant, its employees, or its customers
- Supply chain disruptions that prevent the tenant from operating its business
- Utility failures, cyberattacks, and infrastructure disruptions beyond the parties' control
- Civil unrest, insurrection, or terrorism in the vicinity of the premises
Coverage of Monetary Obligations
The single most important negotiation point is ensuring that the force majeure clause explicitly includes rent and other monetary obligations. This is where landlords will push back hardest, but several compromise structures have emerged as market-standard post-COVID:
- Partial rent abatement (typically 50–75%) during the force majeure period
- Rent deferral with extended repayment (12–24 months post-event)
- Percentage rent conversion during the disruption period (paying a percentage of actual gross sales instead of fixed rent)
- Tiered approach based on severity (e.g., full closure = full abatement; partial restrictions = proportional reduction)
Frame monetary relief as risk-sharing, not risk-shifting. Landlords are more receptive to provisions that share the economic impact proportionally. A clause that reduces rent by the same percentage as the government-mandated capacity reduction (e.g., 50% capacity restriction = 50% rent reduction) is both fair and increasingly accepted by institutional landlords.
Pre-COVID vs. Post-COVID Force Majeure Clauses
| Element | Pre-COVID (Typical) | Post-COVID (Best Practice) |
|---|---|---|
| Triggering Events | Fire, flood, earthquake, acts of war, strikes | All of the above plus pandemic, epidemic, government orders, public health emergencies, supply chain failures |
| Monetary Obligations | Explicitly excluded from force majeure relief | Included with tiered abatement or deferral mechanisms |
| Notice Period | 5–10 business days, strict compliance required | 15–30 days, with "reasonable efforts" standard and retroactive application |
| Duration Cap | 30–90 days before termination right triggers | 180–365 days with periodic review and mutual adjustment |
| Proof Standard | Tenant must prove impossibility | Material adverse impact on tenant's ability to operate or generate revenue |
| Termination Rights | Landlord only, after short cure period | Mutual termination right if force majeure exceeds defined duration |
| Insurance Interaction | Not addressed | Lease relief coordinates with business interruption insurance proceeds |
| Co-tenancy Clause | Rarely linked to force majeure | Force majeure triggers co-tenancy protections in retail leases |
Pandemic-Specific Provisions to Add Now
Beyond strengthening your force majeure clause, post-COVID lease negotiation now includes several standalone provisions that did not exist in standard leases before 2020.
Government Order Rent Adjustment Clause
This standalone provision triggers automatic rent adjustment when a government authority issues an order that restricts the tenant's use of the premises or limits customer access. Unlike force majeure, which requires the tenant to invoke the clause and prove eligibility, a government order rent adjustment clause operates automatically based on objective criteria.
Operating Expense Pass-Through Suspension
During COVID, many tenants were billed for operating expenses (CAM charges, property taxes, insurance) for common areas and amenities they could not access. A modern lease should provide that operating expense pass-throughs are proportionally reduced during any period when the tenant cannot access common areas or when building amenities are unavailable.
Continuous Operation Waiver
Many retail leases require tenants to continuously operate during business hours, with violations constituting a default. Post-COVID leases should explicitly waive continuous operation requirements during any period of government-mandated closure, public health emergency, or force majeure event.
Early Termination Right
If a force majeure event extends beyond a defined period (typically 180 to 365 days), both parties should have the right to terminate the lease without penalty. This protects tenants from being locked into a lease for a space they can no longer use profitably, while giving landlords the ability to find a new tenant.
Business Interruption Insurance: The Missing Piece
One of COVID's harshest lessons was that most business interruption insurance policies did not cover pandemic-related losses. Insurers successfully argued that virus contamination did not constitute "physical damage" to the premises—the standard trigger for business interruption coverage. Courts overwhelmingly agreed.
For lease negotiation purposes, this creates two imperatives:
- Do not rely on insurance as a substitute for lease protections. Your force majeure clause and pandemic provisions must stand on their own, regardless of whether your insurance covers the loss.
- Coordinate lease relief with insurance proceeds. If you do obtain business interruption coverage that includes pandemic coverage (increasingly available but expensive), your lease should specify how insurance proceeds interact with rent abatement. A well-drafted clause prevents the landlord from claiming that insurance proceeds offset any lease-based rent relief.
Since 2022, many business interruption policies now include explicit virus and pandemic exclusions. Even policies purchased after COVID may not cover the next pandemic. Review your policy's exclusions annually and ensure your lease protections do not depend on insurance coverage you may not actually have.
The Math: Cost of a 6-Month Disruption With vs. Without Force Majeure Protections
The financial impact of proper force majeure protections becomes stark when you model a real scenario.
Base rent owed: $135,000 × 0.5 = $67,500
CAM / operating expenses: $12/SF × 3,000 SF × 0.5 = $18,000
Legal fees for failed force majeure claim: $25,000–$75,000
Late fees and default interest (8%): $3,600
Total cost during disruption: $114,100–$164,100
Base rent: 75% abatement for full closure months = $67,500 × 0.25 = $16,875
CAM / operating expenses: suspended during closure = $0
Legal fees: $0 (clause triggers automatically)
Late fees: $0 (no default during force majeure period)
Total cost during disruption: $16,875
For multi-location tenants, multiply these savings across every location. A tenant with 20 retail locations could save $1.9M to $2.9M during a single six-month disruption event. The cost of negotiating these protections upfront is trivial by comparison.
6 Red Flags in Force Majeure Clauses
The most common and most damaging carve-out. If your force majeure clause contains this language, it provides zero protection for your largest obligation. Push to delete or modify with tiered abatement provisions.
If the triggering events list includes only physical disasters (fire, flood, earthquake, hurricane), courts will likely refuse to extend it to health-related disruptions. Insist on explicit pandemic and government order language.
A 3-day notice requirement during a fast-moving crisis is a trap. In the first days of COVID, businesses were scrambling to secure their premises and protect employees—not reviewing lease provisions. Negotiate 15–30 days with retroactive application.
COVID closures lasted months, not weeks. A 30-day force majeure cap provides almost no meaningful protection. Push for at least 180 days, with a mutual termination right if the event extends beyond 365 days.
If the clause requires performance to be "impossible" rather than "materially impaired" or "impracticable," the threshold is nearly unreachable. Courts interpreted "impossible" literally during COVID—if the tenant could theoretically pay rent from any source, performance was not impossible.
Some leases include force majeure protections that only benefit the landlord (e.g., excusing construction delays) while providing no reciprocal protections for the tenant. Force majeure provisions should be mutual—both parties should receive relief from their respective obligations.
Force Majeure Negotiation Checklist (12 Items)
- Enumerate specific triggering events — Include pandemic, epidemic, government orders, public health emergency, quarantine, supply chain disruption, cyberattack, civil unrest, and utility failure in addition to traditional force majeure events.
- Include monetary obligations — Ensure the clause expressly covers rent, CAM charges, and other monetary obligations with a defined abatement or deferral mechanism.
- Define a tiered relief structure — Full closure = full or near-full abatement. Partial restrictions = proportional reduction. Establish clear metrics for each tier.
- Set a reasonable notice period — 15–30 days to provide written notice, with the clause applying retroactively to the date of the triggering event, not the date of notice.
- Use "material adverse impact" standard — Avoid "impossibility" language. The standard should be whether the event materially and adversely affects the tenant's ability to operate or generate revenue from the premises.
- Ensure mutual application — Both landlord and tenant should receive force majeure relief from their respective obligations. The clause should not be one-sided.
- Include mutual termination right — If the force majeure event extends beyond 180–365 days, either party should have the right to terminate the lease without penalty upon written notice.
- Suspend operating expense pass-throughs — CAM charges, amenity fees, and shared service costs should be proportionally reduced during periods when common areas or amenities are inaccessible.
- Waive continuous operation requirements — Ensure that closure during a force majeure event does not constitute a lease default or trigger any co-tenancy violations.
- Coordinate with insurance provisions — Specify that lease-based rent relief is independent of insurance proceeds. Prevent the landlord from offsetting abatement against your insurance recovery.
- Prevent default acceleration — Ensure that non-payment during a valid force majeure period does not trigger lease default, acceleration of rent, or forfeiture of security deposits.
- Add a catch-all with reasonable scope — Include language covering "any event beyond the reasonable control of the affected party that materially prevents or impairs performance," in addition to the enumerated list, to protect against unforeseen future disruptions.
Frequently Asked Questions
Yes. A lease amendment adding or strengthening force majeure provisions is one of the most valuable modifications a tenant can negotiate mid-term. Use any leverage point—lease renewal, expansion, or even a landlord's need for tenant retention—to propose an amendment. The amendment should explicitly state that it supersedes any conflicting provisions in the original lease.
Generally, no. Force majeure clauses cover unforeseen events that occur during the lease term. If a pandemic is already underway when the lease is executed, a landlord will argue (and courts will likely agree) that the event was foreseeable and therefore not eligible for force majeure relief. However, you can negotiate a specific pandemic carve-out that applies regardless of when the health emergency was declared.
Rent abatement means the rent is forgiven entirely—you never pay it. Rent deferral means the rent is postponed but must eventually be repaid, typically over 12–24 months following the end of the force majeure period. From a tenant's perspective, abatement is significantly more favorable. Many post-COVID leases use a hybrid approach: full abatement for the first 30–60 days, then deferral with extended repayment terms for the remainder of the force majeure period.
Increasingly, yes—particularly for creditworthy tenants with strong negotiating positions. Institutional landlords recognize that a tenant bankruptcy or lease default during a crisis is far more costly than a temporary rent reduction. The key is framing the provision as risk-sharing rather than risk-shifting, and offering the landlord some upside (such as lease extension or reduced termination rights) in exchange for force majeure protections.
Force majeure excuses performance due to an intervening event. Frustration of purpose addresses situations where performance is still possible, but the fundamental reason for the contract has been destroyed. In COVID cases, frustration of purpose proved more effective for tenants because courts were willing to recognize that a government closure order eliminated the tenant's purpose for leasing the space—even if paying rent remained technically possible. However, frustration of purpose is a common-law defense that applies regardless of contract language, while force majeure depends entirely on what the lease says.
Absolutely. Climate-related events, cyberattacks on building systems, infrastructure failures, and civil unrest are all increasing in frequency. A well-drafted force majeure clause should protect against any extraordinary disruption that materially impairs your ability to operate—not just the last crisis. The next major commercial lease disruption is unlikely to be another pandemic; it may be a climate event, a grid failure, or something entirely unforeseen.
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