The Impact of Pandemics Such as the COVID-19 and Other Unforeseeable Events on Leases: Force Majeure or Frustration?
12 Pages Posted: 2 Jun 2020
Date Written: June 2, 2020
In a world of unforeseen occurrences and unpremeditated events, anything can happen. However, following the security consciousness of mankind, parties to a leasehold contract are usually mentally and obligatorily inclined to secure their contract thereby putting measures in place to oblige each other to perform his part in the contract. One of these efficacious measures that have been adopted by parties to a leasehold contract is the making and signing of lease agreements. Many a times, the landlord and his tenant carefully and with the help of an astute lawyer, draft a lease agreement to outline their obligations under the contract. While doing this they are careful enough to input when and how the contract should be put to an end such as including a force majeure clause to the lease agreement. Sadly sometimes, unforeseen occurrences make the contract impossible to carry out by either of the parties. In a bid to put an end to the contract, most times the tenant, resort to the store room of weapons which is the lease agreement, seeking clauses that he may use against the landlord to put an end to their contract. Unfortunately, he does not find any useful because the events he leans upon was never included in the lease agreement nor was it part of the force majeure clause.
The recent outbreak of the 2019 Novel Corona virus (“COVID-19”) in China and its widespread over the world has caused many business activities to come screeching to a halt, as many countries issue orders and advisories for residents to stay at home and for any nonessential business activities to be performed remotely.
During this period of COVID-19, many businesses and tenants such as students do not have access to their premises, and this has called for a legal answer to the effect of the stay at home order on the lease.
This article seeks to answer the questions; do pandemics such as the COVID-19 give rise to a frustrating event or force majeure? What position should the parties take when other unforeseen or unpremeditated events such as war, government restrictions, strikes, natural disasters, and acts of God make the contract impossible of being performed? The article also examines the position of landlord and tenant in the country during this ‘lockdown’ order.
Suggested Citation: Suggested Citation