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For Florida Builders the Force Majeure Provision is Not Just For Hurricanes

By T. Luke Markham | Categories: Articles, COVID-19 task force, Real Estate & Finance | Share March 2020

Photo courtesy of www.rushlimbaugh.com

When living in Florida, Force Majeure provisions are often reviewed when Florida falls within a hurricane’s “cone of uncertainty”.  For those unfamiliar with this French term, Force Majeure is defined by Black’s Law Dictionary as “an event or effect that can be neither anticipated nor controlled.”  Within this definition falls acts of nature (e.g. a hurricane) or acts of people (e.g. strikes or war). Florida Builder’s are often familiar with the risks associated with hurricanes, which include material shortages, labor delays, timely insurance claims/disputes, and delivery deadlines pursuant to contract requirements.

What is often not contemplated when these provisions are drafted is a global pandemic such as coronavirus (COVID-19).  In fact, in some cases, courts have found force majeure provisions do not apply unless the act or event is specifically enumerated.     

In Stein v. Paradigm Mirasol, LLC, courts found that a Force Majeure clause covers events “beyond the control of the Seller”.  The court, however, went on to provide guidance to indicate that delays as a result of sub-contractor performance are found to be within the control of a builder and therefore do not excuse performance.  The same court went on to cite Stand Energy Corp. v. Cinergy Servs., Inc, and state “mistaken assumptions about future events or worsening economic conditions, however, do not qualify as a force majeure”.  This generally implies that performance may not be excused based upon assumptions that might not come to pass.  As such, it is important to continue operating as contractually agreed unless there is some other event that occurs that results in an inability to perform.

If you are currently under contract or are considering entering into a new contract, carefully review the Force Majeure provision and give careful consideration to how continued impacts from the coronavirus (COVID-19) may impact your ability to perform.


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