f you are in a real estate-related business, you undoubtedly work with contracts and agreements in your business. Although we are taught to read everything carefully before you sign a contract, most people simply gloss over the highlights before signing. If you are part of the minority that actually reads everything that they sign, they you have probably encountered a term called “Force Majeure” buried somewhere in the legalese.
Force Majeure is a Latin term that, when translated, means “Superior Force”. Simply put, this common contract clause is inserted to free parties from liability in situations that are “an act of God”. If something unforeseen pops up, such as war, terrorism, a tornado, a plague, or things that are completely out of the control of the parties, this clause gives everyone an “out”.
Currently, the Covid 19 Virus and the world’s reaction to it has everyone on edge. Real estate contracts are being cancelled and lenders are refusing to lend. Does the force majeure clauses of contracts protect you if you want to back out? I’m not an attorney and you should certainly consult your legal counsel about the clause, but the force majeure clause is something you should be aware of.