A force majeure clause excuses a contracting party from performance of specified obligations when extraordinary events beyond that party's control make performance impossible or impractical. In commercial real estate leases, force majeure provisions are most commonly invoked to toll time-based obligations (construction deadlines, delivery dates, lease commencement dates) when a triggering event prevents the landlord or tenant from meeting a scheduled milestone.
Force majeure is a risk allocation mechanism: the clause identifies which party bears the cost of extraordinary disruption, and its scope is a negotiated product of each party's relative bargaining power.
Force majeure triggering events vary by lease but typically include natural disasters, fires, acts of war, government actions (including mandatory closures or emergency orders), labour strikes, and, following the COVID-19 pandemic, public health emergencies. Pandemics were often omitted from legacy force majeure definitions because they were not foreseeable risks in historical lease drafting; the pandemic prompted widespread revision, and most sophisticated leases drafted or renewed after 2020 explicitly include or exclude pandemic-related government orders as triggering events.
The inclusion or exclusion of a specific event type determines whether the clause applies at all when that event occurs.
The most important limitation of force majeure in commercial leases is that it almost never excuses rent payment. Courts in both Canada and the United States have consistently held that rent payment obligations are absolute money covenants; the tenant's inability to operate due to a force majeure event does not excuse the obligation to pay rent unless the lease explicitly says otherwise.
This was the defining legal outcome of the COVID-19 commercial lease litigation: most tenants who invoked force majeure to justify rent withholding during mandatory closure orders were unsuccessful unless their specific lease contained an explicit rent abatement provision tied to force majeure events. Tenants seeking rent relief during the pandemic largely obtained it through negotiated abatement agreements, not through force majeure litigation.
In lease negotiations, tenants seek broad force majeure definitions that include government orders and pandemics, while landlords seek narrow definitions that exclude economic disruptions and preserve the absolute nature of the rent covenant. From a landlord's perspective, the force majeure clause in a lease is primarily relevant to tenant delivery obligations.
If a tenant is required to complete improvements or begin operations by a certain date, force majeure protection tolls that deadline, rather than applying to rent obligations. Landlords negotiating with creditworthy institutional tenants may accept broader force majeure language in exchange for other concessions; landlords with more negotiating leverage typically resist any language that could be read as qualifying the rent covenant.
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