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Can commercial tenants claim the benefit of force majeure during COVID-19?
My answer would be yes. This is because the pandemic has had a catastrophic impact on businesses, restaurants, offices. Staff is not able to attend office, customers are not entering shops which are anyways shut down because of lockdown orders and the restaurants will not get patrons for a long long time.
In such a case I believe that any commercial entity or business which has taken premises on leave and license agreement can claim the benefit of force majeure. Also, it can even claim the benefit of section 56 of the Indian Contract Act by claiming that it is not possible to use the premises for which it was taken on leave and license.
Rental agreements are called leave and license in legal parlance. Now it is important to note that in a leave and license contract usage of the property for that particular purpose is very important.
Therefore, if on account of COVID-19 the commercial tenant is not able to use the rental property for the purposes of a restaurant, shop or an office he will be in a position to claim the benefit of force majeure.
