Marc A. Angelone, partner in the Real Estate Group, emphasizes the importance of revisiting base lease forms to ensure force majeure provisions address current and modern risks—especially during times of uncertainty and unprecedented circumstances.
In the article, Marc notes how the recent instability in U.S. trade policy presents an opportunity to review these provisions:
The unrelenting and pervasive uncertainty surrounding current trade wars presents another opportunity to shine up that recently polished force majeure clause to address the newest force majeure event: the effect of tariffs on the reduced availability or the prohibitive costs of equipment and materials.
In addition to addressing the unavailability of labor or materials, which could mean higher prices and inventory shortages, common build-out requirements should also be addressed:
Although you may currently be negotiating the terms of a lease and may be looking at the current costs and availability of equipment and materials to complete the build-outs, it normally takes some additional period of weeks or months before that lease gets finalized and signed. That build-out will not begin until the lease is signed, and then that build-out deadline will be some number of weeks or months after that. Therefore, you may be moving forward under the assumption of current equipment availability and cost to meet timeline obligations; however, it is important to instead consider (and somehow divine) the availability of those items months from now.
To protect from these uncertainties, Marc emphasizes expressly stating in your force majeure provision that these items are “uncertain and beyond control…adding them to the specific list of force majeure events that excuse or delay a party’s obligation to perform.”
Read the full article on the Boston Business Journal’s website.
