Business and Legal Insights

Due to COVID-19, parties to commercial contracts are invoking force majeure clauses. Chances are, parties to Florida real estate contracts didn’t give much thought to a force majeure clause when they drafted their agreement, other than to make sure there was one and, possibly, to make sure it covered hurricanes. Now there’s a pandemic and parties to purchase and sale agreements and leases are looking to see if they have a force majeure clause and what it covers.

Despite a number of large hurricanes in the last 20 years, Florida courts have not had to say much about force majeure clauses. Last year, a Florida federal court considering a force majeure clause noted that they are to be narrowly construed, meaning that a court should limit these clauses’ application as much as supported by the language of the provision. The same court also noted that force majeure clauses will excuse a party’s performance only for events specifically identified in the provision. Fittingly, the court also said that “[p]recedent on the enforcement of force majeure clauses is limited in Florida.”

Many force majeure clauses include “epidemic” or “pandemic” as qualifying events. To our knowledge, there are no Florida cases addressing a force majeure clause in the context of an epidemic or pandemic, though that may change because of COVID-19. These terms are typically not defined in most contracts, and there is no body or agency that has “final” authority to declare an epidemic or pandemic. If, however, the Centers for Disease Control or World Health Organization were to declare an epidemic in an applicable geographic region or a pandemic (as the WHO did), a court may very well consider that enough to trigger a force majeure clause that includes epidemics or pandemics.

Ultimately, parties should check the language in their contract.