Charlotte School of Law, LLC, 2018 NCBC 80.) While the lease contained a force majeure provision that excused performance based on “inability or delays in obtaining governmental permits,” the provision expressly stated that it only applied to duties “other than the payment of any monetary sums due hereunder” – a detail on which the court relied in finding that the tenant breached the lease by failing to pay rent. Business Court, a law school lost its license to operate and argued that it should be excused from performing its obligations as a tenant. For example, in a 2018 case before the N.C. If a lease contains such a provision, its wording will be critical. Leases sometimes include force majeure provisions that expressly address the parties’ obligations in the event of an “act of God” or other catastrophe. Legal concepts that are important in evaluating whether a commercial tenant might be excused from its lease obligations include “force majeure” and the doctrines of “impossibility” and “frustration of purpose.” Each of these concepts has been examined by North Carolina courts in the context of landlord-tenant disputes. In the commercial context, a tenant may find itself not only short of cash, but expressly prohibited from operating its business as intended. ![]() ![]() While tenants of all sorts may experience difficulty paying rent in light of current economic challenges, commercial leases present an especially complex legal issue. Another topic affecting the real estate industry is whether coronavirus will excuse tenants from paying rent. In a recent post, I discussed the effect of COVID-19 on real estate closings.
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