The short answer is no, unless the lease specifically allows for termination in such cases via a force majeure provision or it can be established that the lease has ended in accordance with the common law doctrine of frustration.
We have posted other materials on our website regarding these issues in relation to contracts and the same general principles apply to commercial leases. You should refer to those materials here for further information.
In difference to many other types of commercial contract, commercial leases rarely contain force majeure provisions. However, where there is a force majeure provision, the tenant will need to navigate its requirements carefully as the burden of proof will usually lie with the party seeking to rely upon the provision; so early review and professional advice is essential.
As a result of the infrequency with which force majeure clauses are found in lease agreements, tenants may instead hope to rely on the doctrine of frustration to discharge the lease and their liabilities under it. Frustration only has application where unforeseeable circumstances either radically alter the nature of the parties’ obligations or make it (physically or commercially) impossible, rather than more difficult, for the parties to perform their obligations under the lease or tenancy. Although the accepted position is that a lease can, in principle, be frustrated by the occurrence of a change in circumstances beyond the reasonable control of one or more of the parties, the threshold is exceptionally high and, in the past, the courts have taken quite a restricted line to the principle of frustration. As there are no reported instances of the doctrine ever having been used successfully to discharge a party’s obligations under a lease, whether this becomes a realistic tool for tenants seeking early termination may well depend on the introduction and extent of further restrictions, their duration and the long-term support in place for businesses going forwards.
This note is for general information and guidance and is not legal advice.