Let's Connect  778-565-4700

Patrola Law

Business Lawyers in Surrey, B.C., Canada
  • About
    • FAQ
  • Services
    • Business
      • Buying/Selling a Business
      • Incorporations
      • Trademarks
      • Corporate Governance
      • Corporate Reorganization
      • Mergers & Acquisitions
      • Securities
    • Contracts & Agreements
      • Shareholder Agreements
      • Partnership/JV Agreements
      • Lease Agreements
      • Franchise Agreements
      • Buy Sell Agreements
      • Employment Contracts
      • Contract Negotiations
    • Employment & Litigation
      • Employment & Labour
      • Employment Contracts
      • Civil Litigation
      • Small Claims
    • Immigration
      • Business Immigration
    • Real Estate
      • Commercial & Residential
      • Lease Agreements
    • Wills & Estates
      • Estate Planning
      • Probate and Estate Administration
    • Industry
      • Dental Law
      • Blockchain Law
  • Lawyers
    • Perpinder Singh Patrola
    • Sundeep Singh Gill
    • Simon Joo
    • Suprina Bassi
  • Blog
  • Contact
Force Majeure Lease Agreements Header
July 8, 2020

Force Majeure Clauses in Lease Agreements During Covid-19

Lease agreements are long and full of dry content. In truth, there really isn’t a way to make them more fun. 

But there are ways to negotiate and draft lease agreements to protect your rights more fully.

A force majeure clause is an especially relevant consideration in light of the COVID-19 Pandemic.

Force Majeure and COVID-19

There have been a number of cases where lessees or lessors have been unable to fulfil their obligations with respect to their lease agreements during the COVID-19 Pandemic. 

No one could have predicted that the world would change this way overnight. 

However, if you had your lease agreement reviewed by a lawyer, it may be the case that your lease agreement contains a force majeure clause.

A force majeure clause allows for contracting parties to agree on what happens to their contract upon the occurrence of an event that goes beyond the control of either party.  

For example, parties may agree to excuse or delay the performance of certain contractual obligations upon the occurrence of such an event. An example of such an event could be a “pandemic,” an “epidemic,” an “act of God,” or “the enactment of restrictive governmental laws or regulations.”

It is very important to have a force majeure clause in your lease agreement. A well-drafted force majeure clause will allow lessors and lessees some control over what happens to their contractual obligations in the face of circumstances they could not have otherwise predicted. 

If your lease agreement lacks a force majeure clause, a party seeking to get out of their lease may attempt to rely on the common law doctrine of frustration. And, if the doctrine of frustration is applied successfully, the effect is such that it voids the entire contract between the parties.

The following example describes a scenario that invokes the force majeure clause.

The Situation

Preet leased a building from Ahmed. Preet runs a daycare out of this building.

When the COVID-19 Pandemic hit, all of Preet’s kids stopped coming in for daycare. This was because the kids’ parents were now working from home and did not need Preet to take care of them for the interim.

Preet had monthly rent to pay, but was unable to keep paying it with no income coming in.

Preet tried reasoning with Ahmed, however Ahmed was not willing to compromise and demanded the rent from Preet. 

Luckily for Preet, she had her lease agreement reviewed by a lawyer before it was executed, and her lawyer was able to negotiate a force majeure clause into her agreement with Ahmed. 

The clause was written in such a way that Preet could delay paying rent during the pandemic, without breaching the contract.

When she brought this up in her response to Ahmed’s demands, he decided to back off and wait it out until Preet reopened her daycare. 

Preet and Ahmed then agreed to negotiate a way for her to spread out the outstanding rent payments across the remainder of the lease term.

The Takeaway

Be like Preet – she sought legal advice before entering her lease agreement and it helped her possibly avoid eviction and/or thousands of dollars in lawyer fees.

If you are entering a lease agreement or your lease agreement is coming up for renewal, you should consider having it reviewed by a lawyer.

If you have any questions, please contact us directly at (778) 565-4700 or simply fill out our contact form.

The preceding content is for informational purposes only and does not constitute legal or professional advice. To obtain such advice, please contact our offices directly.

Last updated on June 29th, 2022 at 12:31 pm

contracts, legal documents, covid-19, force majeure, lease agreements

Best Business of 2022

Patrola Law - Best Business of 2022

Patrola Law is proud to be selected as one of the best law firms in Surrey on Three Best Rated in the following categories:

Best Business lawyers in Surrey
 

Best Intellectual property lawyers in Surrey

questions_cta

 

Categories

  • Starting a Business (37)
  • Growing a Business (8)
  • Buying/Selling a Business (6)
  • Legal Support (92)
    • Franchising (4)
    • Corporate Law (23)
      • Incorporations (11)
    • Intellectual Property (27)
    • Employment Law (20)
      • Korean ( 한국어) (5)
    • Litigation (1)
    • Blockchain (9)
    • Dental Law (4)
    • Real Estate Law (5)
    • Securities (1)
    • Wills & Estates (5)
  • Legislation Updates (12)
Patrola Law © 2025
Privacy Policy
Call us now
Schedule Call Now