Force majeure is defined as the impossibility to perform contractual duties due to an event not attributable to either party. Most contracts have provisions that further explain what is considered force majeure for that contractual relationship, as well as what the consequences of such inability to perform contractual duties are. Having a state of emergency due to COVID-19 does not necessarily mean that one could invoke force majeure. It will depend on the situation. On top of that, the majority of, particularly, lease agreements usually lack such a boilerplate clause, which means that the parties should look for the answers within the governing law of the contract.
Force majeure means that there is an absolute inability for the lessee or lessor to perform their contractual obligations.
For example, the obligation of the lessor could be to hand over the leased commercial premises in a building to a lessee. Before the handover date stipulated in the lease contract the state ordered that the building in which the leased space is located must be closed due to the safety measures. If that building is closed by the Government order, that constitutes the impossibility for the lessor to hand over the leased space and thus fulfill his contractual obligation. However, these situations are not so common.
On the other hand, the majority of lessees have directed their employees to work from home, in order to comply with the above-mentioned Government’s Decree, resulting in numerous leased workplaces becoming empty. However, some lessors have still been requesting their lessees to pay the rent. The problem with the application of the force majeure in described situation lies in the fact that in most cases, the buildings themselves, in which the employers conduct their business activities, have not been shut down by the mandatory decision of the respective authorities. In other words, most of the lessees have not been absolutely disabled to use the leased workplace, and thus the existence of the force majeure would be hard to prove. The situation is different when it comes to shopping malls, whose work has been explicitly forbidden by the authorities.
To sum up, in cases when a governmental decision (such as the Government’s decision adopted during the period of a pandemic) directly causes the inability of one party to perform its contractual obligation, that party has the possibility to invoke force majeure. However, it depends on the particular situation.