A force majeure commercial lease clause almost never excuses rent, and 2020 proved it in court. The pandemic sent thousands of tenants to the clause they assumed would suspend their obligations, and most of them lost. Courts read force majeure narrowly, tie the outcome to the exact words on the page, and in the majority of leases those words carve monetary obligations out of the clause entirely. The lesson operators should have taken from 2020 is not that force majeure failed. It is that the clause was doing precisely what its text said, and almost no one had read the text closely enough to know what it said.
Key Takeaways
Force majeure is interpreted extremely narrowly and is governed by the specific words of the clause, not by the severity of the disruption, per the National Law Review and Holland & Knight.
Most commercial leases carve monetary obligations out of force majeure, so even a triggered clause does not excuse rent unless rent is not expressly excluded.
In the leading COVID case, In re Hitz Restaurant Group, the bankruptcy court found the clause triggered but reduced rent only in proportion to the roughly 75 percent of the space rendered unusable by the shutdown order, per Jones Day.
Frustration of purpose and impossibility are narrow common-law backstops, and courts including the Pennsylvania Superior Court refused to apply them to excuse pandemic rent defaults.
Force majeure relief is almost always suspension, not forgiveness. Once the event ends, deferred rent becomes due and payable, per Certilman Balin.
What Does a Force Majeure Clause Actually Do in a Commercial Lease?
A force majeure clause excuses a party from performing a contractual obligation when a defined event beyond its control makes performance impossible or impracticable. In a commercial lease it typically covers acts of God, war, government orders, and labor disruption. It does not float free of its text. It covers only the events listed and only the obligations it does not expressly exclude.
The clause is a risk-allocation tool, not a hardship escape hatch. It answers one question: when an unforeseen event stops performance, who bears the cost. The answer lives in three parts of the clause that operators routinely skim. The first is the enumerated event list, which defines what counts as force majeure and often ends with a catch-all like "or other causes beyond the party's reasonable control." The second is the causation standard, which requires the event to actually cause the nonperformance, not merely coincide with it. The third, and the one that decides most disputes, is the carve-out.
Per the National Law Review's analysis of pandemic litigation, courts interpret these clauses extremely narrowly and hold parties to the precise language they negotiated. A clause that lists "epidemic" or "pandemic" or "government-mandated closure" behaves very differently from one that does not, and a court will not read those words in for a party that failed to negotiate them.
Can a Tenant Use Force Majeure to Stop Paying Rent?
Usually not. Most commercial leases are drafted so that force majeure does not excuse the payment of rent or other monetary obligations. Per Certilman Balin, even if COVID-19 qualified as a force majeure event, a clause that carves out rent means the tenant still owes it. The carve-out, not the event, decides the case.
This is the single most important thing to understand about the clause. The typical force majeure provision contains language along the lines of "nothing herein shall excuse Tenant from the timely payment of Rent." When that sentence is present, the analysis is over before it begins. The tenant may be excused from an obligation to build out, to open by a date, or to continuously operate, but rent runs regardless.
Where rent is not expressly excluded, the picture shifts. Per Certilman Balin and the National Law Review, some courts granted relief when the monetary carve-out was absent and the government order fell squarely inside the enumerated events. Even then, the relief is almost always a deferral. As Certilman Balin frames it, once the force majeure event ceases, the deferred or suspended rent becomes due and payable. Suspension is not forgiveness.
Clause language | Practical effect on rent |
Rent expressly carved out of force majeure | Rent owed in full; force majeure irrelevant to payment |
Rent not carved out, event enumerated | Possible deferral if causation shown; rent still accrues |
Rent not carved out, event not enumerated | Tenant relies on catch-all; narrow reading usually defeats it |
Clause silent on monetary obligations | Ambiguity litigated; outcome jurisdiction-dependent |
What Did COVID-19 Court Rulings Establish About Force Majeure and Rent?
The pandemic produced a rare body of force majeure case law, and its central lesson is that outcomes tracked the lease text, not the crisis. In the most-cited decision, In re Hitz Restaurant Group, an Illinois bankruptcy court found the force majeure clause triggered by the governor's shutdown order but reduced rent only in proportion to the space made unusable.
Per Jones Day's analysis of Hitz, the court concluded that because roughly 75 percent of the restaurant space could not be used for on-premises dining under the executive order, the tenant's rent obligation should be reduced by that proportion, not eliminated. The reasoning is instructive. The clause was not a switch that turned rent off. It was a proportionality instrument tied to the exact scope of the government-ordered impairment, and the court did the arithmetic.
Consider what that reasoning implies as a worked example. Suppose a tenant pays $20,000 per month and a closure order renders 75 percent of the leased space unusable while allowing takeout from the rest.
Line item | Amount |
Contract monthly rent | $20,000 |
Share of space impaired | 75% |
Rent reduction under Hitz logic | $15,000 |
Rent still owed for the period | $5,000 |
The tenant did not walk. It owed the portion attributable to the space it could still use. That is the opposite of the blanket suspension many tenants assumed the clause provided, and it is why generic force majeure language so often disappointed the party invoking it.
Do Frustration of Purpose and Impossibility Help When Force Majeure Fails?
Rarely. Frustration of purpose and impossibility are narrow common-law doctrines that courts declined to stretch during the pandemic. Per Holland & Knight, courts described frustration of purpose as "a narrow one," available only where the contract's basis is completely destroyed, and treated a mere diminution in business as insufficient to excuse rent.
These doctrines are the backstop tenants reach for when the force majeure clause carves out rent or omits their event. They almost always fail for the same structural reason. The Pennsylvania Superior Court held that neither frustration of purpose nor impossibility absolved a commercial tenant of rent that went unpaid after a governor's closure order, per Tucker Arensberg. New York courts, per the New York Commercial Division practice commentary, held that economic hardship, however severe, does not excuse lease performance, and that the triggering event must be wholly unforeseeable.
Force majeure did not fail in 2020. It performed exactly as drafted, and the tenants who lost had simply never read the clause closely enough to know what they had agreed to.
The common-law doctrines share the clause's discipline. A partial loss of business is not a total destruction of purpose. A space that can still be occupied is not impossible to use. And a risk that could have been allocated by a better-drafted clause is, in the court's eyes, a risk the parties chose to leave where it fell.
How Should Operators Read Force Majeure in Diligence Now?
Read force majeure as a rent question first and an event question second. Before cataloguing the enumerated events, find the monetary carve-out. If rent is expressly excluded, the clause cannot suspend rent no matter what event occurs, and the analysis for underwriting purposes is effectively closed on the payment side.
The practical diligence sequence is short and repeatable. First, locate any sentence excluding payment obligations, because it governs. Second, read the event list for pandemic, epidemic, quarantine, and government-order language, since post-2020 leases increasingly name them. Third, check the notice and mitigation conditions, because a party that skips required notice can forfeit the defense. Fourth, note the deferral mechanics, since suspended rent that becomes due later is a timing issue, not a loss.
This is exactly the kind of clause-level reading that a summary rent roll or a lease-abstract cover sheet hides. The force majeure provision is often reduced to a yes-or-no field, when the entire outcome turns on one carve-out sentence buried in it. Firms building portfolios of leases should abstract the carve-out language itself, not just the presence of the clause. For related diligence discipline, see how an estoppel certificate surfaces the obligations a lease summary omits, and how automated lease abstraction can preserve clause text rather than flattening it into a checkbox.
Frequently Asked Questions
Does force majeure excuse rent in a commercial lease? Usually not. Most commercial leases carve monetary obligations out of the force majeure clause, so rent remains due even when the clause is triggered. Rent may be excused or deferred only where it is not expressly excluded and the event fits the enumerated causes.
What was the ruling in the Hitz Restaurant force majeure case? In In re Hitz Restaurant Group, the bankruptcy court found the force majeure clause triggered by a COVID-19 shutdown order but reduced rent only in proportion to the roughly 75 percent of space rendered unusable, per Jones Day. The tenant still owed rent for the usable portion.
Is force majeure relief permanent or temporary? It is almost always temporary. Force majeure typically suspends or defers an obligation rather than forgiving it. Per Certilman Balin, once the force majeure event ends, any deferred or suspended rent becomes due and payable.
Conclusion
The force majeure commercial lease clause was never the blanket escape tenants treated it as in 2020, and the courts spent the pandemic saying so one narrow ruling at a time. The clause allocates risk by its exact words. When it carves out rent, it cannot suspend rent. When it names an event, that event can trigger it, and when it does not, a catch-all rarely rescues the party that failed to negotiate the language.
For operators, the takeaway is a diligence habit, not a legal theory. Read the carve-out before the event list. Preserve the clause text in abstraction rather than reducing it to a field. And underwrite the clause for what it actually does, which is suspend non-monetary performance in narrow circumstances and defer, at most, the rent it does not exclude. The firms that read force majeure this way priced 2020 correctly. The firms that assumed the clause meant relief learned the difference in court.
Related
Automated Lease Abstraction