Commercial leases may contain a variety of unique terms. Factors, including the type of commercial space rented and the purpose of the business leasing the space, largely influence the contents of the lease.
Frequently, commercial leases require a multi-year commitment from the tenant. They may be responsible for rent even if the company fails in some cases. Landlords could also face complaints from business tenants in scenarios where property issues affect their business operations.
It is possible to negotiate to add special terms to a commercial lease. Both parties signing a commercial lease might benefit from adding a force majeure clause to the contract in case there are unexpected challenges in the future.
What is the purpose of a force majeure clause?
A force majeure clause addresses challenging circumstances outside of either party’s control. Acts of war or natural disasters are examples of situations that could trigger a force majeure clause in a contract.
In a commercial lease, a force majeure clause can allow a tenant to terminate the lease early if unforeseeable and uncontrollable factors prevent them from continuing to operate the company. The same clause could also protect the landlord from litigation based on their inability to provide amenities for the business due to factors outside of their control.
Force majeure clauses allow for the termination of a long-term lease without financial and legal consequences for either party. Reviewing and customizing the terms of a commercial lease with a skilled legal team can help both landlords and tenants optimize their protection. Those who prepare for unpredictable circumstances take on less risk when signing a long-term lease.