Hurricane Legal Issues

Now that Hurricane Irma has passed, interrupting commerce from Key West, Florida to Jacksonville, Florida, it is now time to truly read and concentrate on “boilerplate” in your contracts. Yes, ‘boilerplate,” that is, all those provisions where the instructions are to just “get it off the computer.” Truly, when you work with a knowledgeable attorney, he knows that it is more important than that. The importance of “boilerplate” is now front and center because of this major storm. Within “boilerplate” is a clause often referred to as an “Acts of God” clause, or for the agnostics among you, the “Force Majeure” clause.

“Acts of God” and “Force Majeure” clauses pop up for the most part in two situations, construction contracts and leases. In construction contracts, it is most frequently litigated in connection with the “2 year completion of construction” rule which is a part of the Interstate Land Sales Full Disclosure Act ("ILSA"), 15 U.S.C. § 1701 et seq. Developers are looking to extend the period of completion as a result of an event beyond their control. In leases, the clause gives the landlord the ability to kick a tenant out of a lengthy lease term that may have benefited the tenant because the property is rendered un-tenantable. But, also, closings are often extended by such clauses and contract performance excused in numerous other types of scenarios.

Here is the point, if you allow a good draftsman some time to discuss “boilerplate” with you, we can draft a clause favoring one party of over the other. For example, we can change that clause that allows the landlord to escape his obligation to rebuild the premises following a casualty. In drawing leases, we have two completely different clauses: (i) one favoring the tenant (landlord MUST rebuild and do it quickly) , and (ii) one favoring the landlord (landlord may or may not rebuild and may ask the tenant to leave). It can be the difference between financial survival or financial death for either party.

Do not wait for the next storm. Let us go over your lease or contract with you or give us the opportunity on the next document to discuss the “boilerplate” with you in detail.

By: Michael Weiner, Esq.

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