Many, if not most, contracts and lease agreements have force majeure clauses that void or suspend the contract in the event that the performance of contract become impossible, i.e. whether you can suspend paying rent to your landlord or completely cancel your lease in extreme cases, whether you have to pay the hotel for a professional function that you scheduled in advance, whether you have to accept delivery of dental or medical devices and inventory and pay for them, etc.
These clauses are not all the same and they can vary in how they affect the respective rights and responsibilities of the parties to the contract. It is important to keep in mind that your rights and obligations under the terms of your contracts and/or leases depend on the specific language of the clauses and which State law applies to your contract. Because these clauses are negotiated in advance of a pandemic due to Corona virus when it was unlikely to be anticipated, the language may or may not specifically identify a pandemic as a force majeure event; however, in certain cases the force majeure clause may still be triggered if the effects of the pandemic renders the performance of the contract impossible even if pandemic is not specifically identified in your contract. Also, most contracts include a “choice-of-law” provisions that mentions which State law will be used to interpret the contract, and if the applicable State law is not identified in the contract, there is a whole body of law and precedent that must be analyzed to see which State law applies if there is a choice.
In these uncertain times when no one really knows how long your dental or medical practices are going to be closed and we do not know when you can start generating revenues again, it would be wise to review your contracts and leases to see what are your rights and obligations, to see whether you can suspend your big item expenses, and try to negotiate with the other party and/or your landlord to minimize your liabilities and expenses. These decisions can make a difference between the dentists and doctors that survive this calamity and those who do not.
Even before Covid 19, my law office was set up to handle transactions electronically from A-Z; I am here to help you and your practice succeed. Feel free to contact me if you would like your contracts and/or leases reviewed so you can be ahead of the curb and succeed in these unprecedented times.
Have a Strong Advocate on Your Side!
A. Shane Kamkari, Esq.