Wednesday, April 1, 2020

Does a pandemic excuse performance of a lease or other contract?

The short answer is Maybe.

Contract law generally seeks to enforce the parties' intent.  For example, parties to a lease agree that in exchange for paying rent the tenant temporarily is entitled to the premises.  Civil courts are available to enforce the parties' rights and responsibilities in the event of a breach (failure to perform).

"Impossibility of performance" is a defense to a breach of contract claim.  In Colorado for example (and typical of most jurisdictions), the doctrine precludes legal responsibility for breach of contract where (1) the defendant's (say, the tenant's) performance of her promise was made impossible as a result of (among other things) an "Act of God" (natural disaster or similar - like a pandemic?), (2) the tenant could not have reasonably foreseen the event, and (3) the tenant did not cause the event.

What is considered "impossible?"  Impossible here means "the contract cannot be performed physically or without violating the law or without incurring extreme and unreasonable difficulty, expense, or risk of injury or loss to persons or property."  Colorado Civil Jury Instruction 30:24.

If the tenant timely gave notice of (and later as necessary proved) impossibility of performance, it might excuse rent payment but not entitle her to remain on the premises - leaving her with the very practical problem of finding another place to live - or automatically result in the mythical security deposit refund.

A basis "of the doctrine of impossibility is the unconscionability of insisting on strict performance [of the lease or other contract] in the light of radically changed circumstances."  Contracts, by Calamari and Perillo, p. 509 (West 1982).  And in these strange times, Who can say how things will go.

Indeed, every situation is different and consulting an experienced attorney wisely is recommended before proceeding in legal matters.  -Sanderson Law, P.C., 303-444-8846.