Can I Claim “Force Majeure” (Act of God) to Stop Paying my Rent/Lease Payments?

Note: The following is not intended, and should not be construed as, legal advice. Ceterus strongly encourages our customers to seek qualified legal assistance on this and all relevant legal matters.

"Force majeure" translates literally from French as "superior force”. Force majeure is commonly understood to refer to “Acts of God” or, more basically, events which can not be anticipated or controlled. In contract law, “force majeure” provisions can be used to excuse non-performance of a party; so a default of an obligation (like paying a rent or lease payment may occur but does not immediately result in default or termination.

A few points to consider:

  • There is substantial reason to believe that beyond the specific language in a lease or other contract, your contract partners will not immediately enforce contract terms at this moment in time: because there is a common recognition of the scope of the pandemic; because some legislative bodies and regulatory agencies are instituting laws/regulations to limit such actions; because many courts are closed for non-emergency proceedings.

  • It would be more practical to consider your obligations (e.g., to pay rent) to be delayed and not forgiven, but also that you may be relieved of any obligation to pay late fees or penalties resulting from late payments. Again, talk to your lawyer.

  • Current legislation being proposed is oriented to keeping small business open and operating.

Taken together, as you look to manage your cash reserves, your lawyer may advise that deferring major payments like rent and lease payments is a sensible option.



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