Few tenants thought much about force majeure clauses before 2020. Then a global pandemic shuttered businesses for months, and suddenly everyone wanted to know whether their lease excused them from paying rent. Courts across the country spent years answering that question, and the answers were not always what tenants hoped.
A force majeure clause excuses a party from performing lease obligations when extraordinary events beyond its control make performance impossible. Pandemics, hurricanes, earthquakes, wars, and government shutdown orders are classic examples. But the protection is only as good as the clause’s wording, and many leases were written with gaps that only became visible in a crisis.
This guide explains how force majeure clauses work in commercial leases, what the pandemic taught us about them, and how tenants and landlords should draft these provisions to handle the next disruption, whatever it may be.
What Is a Force Majeure Clause?
Force majeure, French for “superior force,” is a contract provision that relieves a party from liability when an extraordinary event prevents performance. In a commercial lease, it typically excuses delays in construction, repairs, or other non-monetary obligations caused by events like natural disasters, labor strikes, or government actions.
The critical detail is that most force majeure clauses expressly exclude the obligation to pay rent. This carve-out reflects the landlord’s position that rent is the fundamental bargain of the lease. A tenant whose store floods may be excused from repairing the damage on schedule, but rent usually keeps accruing unless the lease says otherwise.
Whether a specific event qualifies depends entirely on the clause’s list of covered events. Some clauses list pandemics and epidemics explicitly. Others use broad catch-all language like “events beyond the reasonable control of the party.” Courts interpret these lists strictly, so vague wording often favors the landlord.
Lessons From the COVID-19 Pandemic
The pandemic produced a flood of litigation over force majeure clauses, and tenants lost more often than they won. Courts in most states held that government shutdown orders did not excuse rent payments where the lease’s force majeure clause excluded monetary obligations. The fact that a business could not operate did not erase the rent debt.
A few tenants succeeded with creative arguments. Some invoked clauses that specifically mentioned government actions or prohibitions. Others argued that the shutdown frustrated the lease’s fundamental purpose, a separate legal doctrine. But these were exceptions, and they depended on unusually favorable lease language.
The clearest lesson is that generic force majeure language provides little rent relief. Tenants who want protection against future shutdowns need explicit provisions addressing rent abatement during government-ordered closures. Relying on a standard clause and hoping for the best is not a strategy.
Common Triggering Events
Natural disasters are the traditional core of force majeure clauses. Hurricanes, floods, earthquakes, tornadoes, and wildfires routinely appear in the list. For properties in exposed regions, tenants should confirm the clause covers the specific perils their location faces rather than assuming general language suffices.
Government actions form the second major category. Eminent domain takings, zoning changes, building condemnations, and emergency orders can all prevent lease performance. After the pandemic, many tenants now insist on explicit coverage for government-ordered business closures.
Other common triggers include war, terrorism, labor strikes, utility failures, and supply chain disruptions. Each matters more in some industries than others. A manufacturer dependent on imported components cares deeply about supply disruptions, while a retailer worries more about events that close the storefront.
What Is Usually Excluded
Economic hardship is almost never a force majeure event. A recession, a market downturn, or a business failure does not excuse performance, no matter how severe. Courts consistently hold that financial difficulty is a foreseeable business risk, not an extraordinary event.
As noted, rent payment obligations are typically carved out. Some clauses also exclude the tenant’s obligation to maintain insurance or the landlord’s obligation to provide essential services. Reading the exclusions is just as important as reading the covered events.
How Force Majeure Interacts With Other Clauses
Force majeure does not operate in isolation. A tenant excused from operating during a disaster may still face continuous operation clause requirements once the event passes. The lease should clarify how these provisions fit together so the tenant knows when normal obligations resume.
Co-tenancy clauses can also interact with force majeure events. If an anchor tenant closes due to a disaster, smaller tenants may gain rent reduction rights under their co-tenancy provisions. Landlords should consider these knock-on effects when drafting both clauses.
Casualty and condemnation provisions overlap with force majeure as well. Most leases have separate sections addressing what happens if the building is destroyed or taken by the government. These specific provisions usually control over the general force majeure clause, so consistency between them matters.
Drafting a Strong Force Majeure Clause
Specificity is the most important drafting principle. List the events that matter to the parties rather than relying on vague catch-all phrases. If pandemic-related closures are a concern, say so explicitly. If regional perils like hurricanes or earthquakes matter, name them.
Address rent directly. The clause should state plainly whether rent is excused, reduced, or unaffected during a force majeure event. Tenants may negotiate partial abatement during closures, while landlords will push to keep rent whole. Whatever the outcome, clarity prevents litigation later.
Define the notice and mitigation duties. The affected party should be required to notify the other side promptly and take reasonable steps to minimize the disruption. These obligations keep both sides engaged in solving the problem rather than simply invoking the clause and waiting.
Time Limits and Termination Rights
Extended disruptions raise the question of when the lease should simply end. Many clauses give either party the right to terminate if the force majeure event lasts beyond a threshold, often 6 to 12 months. Without such a provision, the parties can be trapped in a lease for a building that cannot be used.
Negotiating Tips for Tenants
Tenants should push for the broadest possible list of triggering events, with explicit mention of pandemics, epidemics, and government closure orders. The pandemic proved that unlisted events create litigation risk, so naming the risks removes doubt.
Negotiate rent relief triggers tied to actual closure. A clause providing for proportional rent abatement while government orders prevent operation gives tenants meaningful protection. Landlords resist this, but the negotiation is worth having, especially for businesses that cannot operate remotely.
Tenants should also review these provisions with the same care they bring when they negotiate a commercial lease generally. Force majeure is one of several risk-allocation provisions, and it should be evaluated alongside insurance requirements, casualty clauses, and operating covenants.
Negotiating Tips for Landlords
Landlords should keep the rent carve-out firm. Excusing rent during disruptions shifts the financial risk of disasters from tenant to landlord, which most owners cannot accept across a portfolio. If any abatement is conceded, it should be narrow, time-limited, and conditioned on the tenant maintaining insurance.
Require prompt notice and diligent mitigation. A tenant that invokes force majeure should have to explain what happened, what it is doing about it, and when it expects to resume performance. These requirements prevent the clause from becoming a blanket excuse for non-performance.
Consider the financing implications. Lenders expect uninterrupted debt service, and a lease that excuses rent during disasters can complicate mortgage underwriting. Landlords should confirm that any force majeure concessions are compatible with their loan covenants before agreeing to them.
Force Majeure and Rent Escalations
Disruptions raise questions about scheduled rent increases. If escalation clauses push rent higher during a period when the tenant cannot fully operate, the burden compounds. Tenants may negotiate to pause escalations during force majeure events, while landlords will argue the schedule should continue.
The fairest approach often ties escalation pauses to the same triggers as rent abatement. If the lease excuses or reduces rent during a qualifying event, freezing scheduled increases for the same period is a logical extension. Addressing this explicitly avoids a second dispute on top of the first.
Insurance as a Companion Protection
Force majeure clauses allocate risk between landlord and tenant, but insurance transfers risk to a third party. Business interruption insurance can cover lost income during covered events, and it often provides more reliable protection than a lease clause alone. Tenants should not treat the two as substitutes.
Review policy exclusions carefully. Many business interruption policies excluded pandemics even before 2020, and insurers tightened language further afterward. The lease’s force majeure clause and the tenant’s insurance program should be designed together, not in isolation.
Preparing for the Next Disruption
No clause can prevent the next crisis, but a well-drafted force majeure provision can keep a lease relationship functional through it. The goal is to share extraordinary risks in a way both sides accepted in advance.