OLA Force Majeure Delay Provision
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An OLA Force Majeure Delay Provision is a force majure delay provision in a office lease agreement provision.
- Context:
- It can (typically) be associated with an OLA Force Majeure clause.
- It can be used to protect both the landlord and the tenant from unforeseen circumstances that prevent them from fulfilling their obligations under the lease.
- It can (often) outline the specific events or situations that are considered as force majeure, as well as the procedures for notifying the other party and the consequences of such an event.
- It can be a crucial part of risk management in an Office Lease Agreement.
- …
- Example(s):
- “In the event of a delay or failure by either party to perform its obligations under this Lease due to events beyond its reasonable control, including but not limited to acts of God, fire, flood, war, government action, or labor disputes, such delay or failure shall not be considered a breach of this Lease, provided that the affected party promptly notifies the other party and makes reasonable efforts to resume performance as soon as possible."
- Tenant-Friendly OLA Force Majeure Provision: such as:
- “In the event of force majeure, including but not limited to natural disasters, the tenant shall be excused from paying rent for the duration of the event, with no penalties."
- Landlord-Friendly OLA Force Majeure Provision: such as:
- “In the event of force majeure, the tenant shall remain obligated to pay rent, but the landlord shall not be liable for any delays in providing services or repairs."
- ...
- a OLA Force Majeure Definition of Events Provision, such as:
- “For the purposes of this Lease, 'Force Majeure Events' shall include, but not be limited to, natural disasters, acts of terrorism, strikes, civil unrest, government regulations, and any other events beyond the reasonable control of the parties."
- an OLA Force Majeure Exclusions Provision, such as:
- “Force Majeure shall not include financial difficulties, changes in market conditions, or any other event that may be reasonably foreseen or mitigated by the affected party."
- an OLA Force Majeure Duration of Relief Provision, such as:
- “If a Force Majeure Event continues for more than 60 days, either party may, upon written notice, terminate this Lease without liability."
- an OLA Force Majeure Mitigation Obligations Provision, such as:
- “The party claiming relief under Force Majeure shall take all reasonable steps to mitigate the effects of the Force Majeure Event and shall resume performance as soon as reasonably practicable."
- an OLA Force Majeure Termination Rights Provision, such as:
- “If the Force Majeure Event prevents performance for a continuous period of 180 days, either party may terminate this Lease by providing 30 days' written notice."
- an OLA Force Majeure Documentation Requirements Provision, such as:
- “The party affected by a Force Majeure Event shall provide written notice and reasonable evidence of the nature and expected duration of the event within 10 days of its occurrence."
- an OLA Force Majeure Dispute Resolution Provision, such as:
- “Any dispute arising out of or relating to the interpretation of the Force Majeure clause shall be resolved through binding arbitration in accordance with the rules of the American Arbitration Association."
- an OLA Force Majeure Rent Abatement or Adjustment Provision, such as:
- “In the event of a Force Majeure Event affecting the Tenant's use of the premises, rent shall be abated proportionately to the extent of the interference, until the Tenant's use is fully restored."
- ...
- Counter-Example(s):
- A provision that holds parties accountable for delays or failures regardless of the cause.
- An agreement that does not include any clause or provision related to force majeure.
- ...
- Counter-Example(s):
- A provision that holds parties accountable for delays or failures regardless of the cause.
- An agreement that does not include any clause or provision related to force majeure.
- See: Force Majeure, Office Lease Agreement.
References
2020
- (Weiner et al., 2020) ⇒ Perrie Weiner, Aaron Goodman, and Alexandra Dunton-Stackhouse, Baker McKenzie. (2020). “Perspective Commercial Leases and Force Majeure." In: Bloomberg Law
- QUOTE: “Force majeure clauses, common in most commercial lease agreements, generally excuse, or temporarily delay, certain landlord or tenant lease obligations due to unforeseen circumstances beyond the parties’ control. With businesses still fully or partially shut down, the federal Paycheck Protection Program (PPP) out of money, and the prospect of additional legislative relief uncertain, tenants have been increasingly leaning on force majeure provisions for relief from rent payments—from leases signed at the peak of the market—they can no longer afford.
Many commercial lease force majeure provisions contain an exception, which specifically excludes rental payments. That is to say, the occurrence of a force majeure event will not excuse payment of rent. In those circumstances, tenants will need to find other avenues of relief (e.g., frustration of purpose, impossibility, impracticability, failure of consideration, reformation, rescission). But for those tenants with force majeure clauses that do not exclude rent payments, they may be entitled to rent abatement and forgiveness.
Parties must determine first whether a force majeure provision applies due to a triggering event. Parties must then examine the standard of performance by asking what specifically does force majeure excuse or delay. Finally, to succeed on a claim or defense under force majeure, the party seeking relief must show applicability by proving that the event which triggered nonperformance falls within the scope of the force majeure provision and that the triggering event is the proximate cause of the nonperformance.”
- NOTE: It provides an in-depth analysis of force majeure clauses in commercial lease agreements, including how they operate and the implications for both landlords and tenants.
- QUOTE: “Force majeure clauses, common in most commercial lease agreements, generally excuse, or temporarily delay, certain landlord or tenant lease obligations due to unforeseen circumstances beyond the parties’ control. With businesses still fully or partially shut down, the federal Paycheck Protection Program (PPP) out of money, and the prospect of additional legislative relief uncertain, tenants have been increasingly leaning on force majeure provisions for relief from rent payments—from leases signed at the peak of the market—they can no longer afford.
2020
- (Ekhator et al., 2020) ⇒ EG Ekhator, A Ogiribo, SI Ebughe. (2020). “The Impact of Pandemics Such as the COVID-19 and Other Unforeseeable Events on Leases: Force Majeure or Frustration?" In: Available at SSRN 3616831.
- QUOTE: “... including a force majeure clause to the lease agreement. Sadly … weapons which is the lease agreement, seeking clauses that … in the lease agreement nor was it part of the force majeure …”
- NOTE: It explores the legal considerations and challenges of including force majeure clauses in lease agreements, especially in the context of unforeseeable events like pandemics.