Force Majeure and Impossibility in New York: When Can You Legally Walk Away From a Commercial Contract?

You sign a five-year commercial lease for a restaurant space in the Meatpacking District. Six months in, a government order forces you to close completely — no indoor dining, no events, no revenue. You stop paying rent. Your landlord sues for the full balance. You argue it was impossible to operate. The law should excuse your performance.

Whether that argument holds up depends heavily on two words: force majeure. More specifically, it depends on what your contract actually says — and how narrowly a New York court will read it.

If the clause doesn't cover the specific situation, or if your contract has no force majeure provision at all, you may still owe every dollar you couldn't pay. Here's what New York law actually says.

What Is a Force Majeure Clause, and Why Does It Matter?

A force majeure clause is a contract provision that excuses one or both parties from performing when an extraordinary, unforeseeable event makes performance impossible. The term comes from French and roughly translates to "superior force." In New York commercial contracts — leases, supply agreements, construction contracts, service deals — these clauses are common. They're also one of the most litigated contract provisions in the state.

A typical clause might read: "Neither party shall be liable for delays or failures in performance resulting from acts beyond its reasonable control, including but not limited to acts of God, fire, floods, earthquakes, war, strikes, government orders, or other causes beyond the party's reasonable control."

That language sounds broad. New York courts treat it as anything but.

How Do New York Courts Interpret Force Majeure Clauses?

Courts enforce force majeure clauses strictly — and read them against the party invoking them. The leading authority is Kel Kim Corp. v. Central Markets, Inc., 70 N.Y.2d 900 (1987), where New York's Court of Appeals addressed a commercial lessee that couldn't obtain required liability insurance and sought to excuse its performance under the lease's force majeure clause.

The court said no. It held that force majeure clauses must be read narrowly, and that the specific events enumerated in a clause limit the scope of any catch-all language that follows. This principle — called ejusdem generis — means that a phrase like "or any other cause beyond the party's control" only covers events similar in kind to those specifically listed. General business disruptions and circumstances that could reasonably have been anticipated don't qualify.

To successfully invoke force majeure under New York law, a party must typically show:

• The event falls within the clause's enumerated events or a legitimate catch-all interpretation

• The event was genuinely unforeseeable at the time of contracting

• The event actually made performance impossible — not merely more expensive or unprofitable

• The party gave prompt written notice as required by the clause

Failing any one of these requirements can defeat a force majeure defense entirely.

What If Your Contract Has No Force Majeure Clause?

If your contract is silent on force majeure, you can still argue the common-law doctrine of impossibility of performance. New York's standard here is among the strictest in the country.

To succeed, you must show:

• Performance has become objectively impossible — not just difficult, risky, or unprofitable

• The impossibility was triggered by an unanticipated event that couldn't have been addressed in the contract

• The impossibility was not caused by your own fault or neglect

New York courts don't recognize commercial impracticability as a standalone excuse for non-performance under common law. If your costs doubled, your supplier backed out, or the deal became a bad one, those are business risks you accepted when you signed. The circumstances that truly qualify are narrow: destruction of the specific property that was the subject of the contract, or a government order making the specific contracted performance illegal.

For contracts involving the sale of goods, UCC § 2-615 provides a limited excuse for sellers when a contingency that both parties assumed would not occur actually does. Courts apply this provision narrowly — price increases and supply disruptions that are commercially common rarely qualify.

What Events Have New York Courts Actually Recognized?

New York courts have found valid force majeure or impossibility excuses in narrow, well-defined situations:

• Physical destruction of the premises or property that was the specific subject of the contract

• A government order or regulatory change that made the specific contracted performance illegal

• Death or permanent incapacity of an individual whose personal services were the specific subject of the agreement

What courts have consistently rejected:

• Economic hardship, falling revenues, or changed market conditions

• Supply chain disruptions that were commercially foreseeable

• General financial distress of a contracting party

• Increased costs of performance — even dramatic ones

• Labor shortages or material price increases that are part of ordinary business risk

During the COVID-19 pandemic, New York courts were largely unsympathetic to force majeure claims grounded in general business disruption. Outcomes varied widely based on exact contract language. When a lease or supply agreement specifically listed "government orders," "pandemics," or "public health emergencies," tenants and vendors had stronger — though still not guaranteed — arguments. Broad economic losses from the pandemic, absent a specific government mandate directly preventing performance, were rarely sufficient.

What Happens When Force Majeure Is Successfully Invoked?

Invoking force majeure doesn't necessarily end the contract. The most common outcomes are:

• Temporary suspension: performance is excused for the duration of the triggering event, then resumes when conditions normalize

• Termination: if the event is indefinite or permanent, either party may terminate; many clauses include time thresholds — often 30, 60, or 90 days — after which termination rights arise

• Partial excuse: if only part of performance is affected, the rest must proceed on schedule

A critical limitation: force majeure excuses future performance only. It doesn't retroactively cancel obligations that already accrued before the triggering event. If you owe three months of unpaid rent from before the force majeure event occurred, that debt remains. The clause shields you going forward — not backward.

Notice timing also matters. Most force majeure clauses require prompt written notification when a party intends to invoke the provision. Courts have held that a party who delays giving notice — even when the underlying event was genuine — may have waived the right to invoke the clause entirely. When in doubt, send notice first and litigate the details later.

How to Protect Yourself: Before You Sign and After a Dispute Arises

Force majeure disputes are largely won or lost at the drafting table, not the courthouse. Here's what matters at each stage.

Before signing a commercial contract:

• Read the force majeure clause — don't assume boilerplate language covers the scenarios you're worried about

• Specifically enumerate events relevant to your industry: government orders, pandemics, supply chain failures, utility outages, key-person unavailability

• Include a clear notice procedure with timelines and required content

• Negotiate a suspension-versus-termination framework so both parties know what happens during a prolonged event

• Consider whether a liquidated damages clause should address partial performance failures caused by disruptions that don't rise to true force majeure

After a dispute has arisen:

• Issue written notice immediately if you intend to invoke force majeure — every day of delay risks waiver

• Document the specific event and its direct causal impact on your ability to perform

• Take mitigation steps and record them — courts expect you to minimize the damage even when performance is excused

• If the other side is invoking force majeure strategically to exit a contract they no longer want, understand the process for enforcing your rights in court

Under CPLR § 213, you have six years from the date of breach to bring a claim for breach of a written contract in New York. Don't let a drawn-out force majeure negotiation push you past that deadline.

If the dispute escalates to litigation, motions for summary judgment are frequently used in contract cases to resolve force majeure questions on the papers — particularly when the contract language is unambiguous. Commercial lease disputes may also involve emergency injunctive relief to pause enforcement pending resolution, similar in structure to how Yellowstone injunctions protect tenants facing lease termination.

Frequently Asked Questions

Does COVID-19 automatically trigger force majeure in a New York commercial contract?

Not automatically. New York courts evaluated each contract individually. If the force majeure clause specifically listed pandemics, government orders, or public health emergencies — and a direct government mandate actually prevented the contracted performance — you had a stronger argument. General economic hardship from the pandemic, without a specific order directly blocking performance, was rarely enough on its own.

What's the difference between force majeure and frustration of purpose?

Force majeure applies when performance becomes impossible. Frustration of purpose applies when performance is technically still possible, but the entire reason for entering the contract has been destroyed by an unforeseen event. New York recognizes frustration of purpose, but applies it just as strictly — the frustrated purpose must have been the central reason for contracting, not merely one motivation among many.

Can force majeure pause a contract temporarily rather than end it?

Yes, if the clause provides for it. Many force majeure provisions allow for suspension during the triggering event, with obligations resuming when conditions normalize. Others allow either party to terminate if the force majeure condition lasts beyond a set threshold. The clause's exact language controls — which is why what you negotiate before signing matters far more than what you argue after the dispute begins.

What if the other party is using force majeure as an excuse to exit a deal they simply regret?

New York courts don't look favorably on bad-faith force majeure invocations. If a party walked away because the deal became economically unfavorable — not because performance was truly impossible — that's assumption of risk, not force majeure. Courts examine whether the claimed event actually prevented performance or merely made it less profitable. A strategic force majeure claim can be challenged effectively, and damages for wrongful repudiation may include the full value of the expected contract performance.

When a force majeure dispute threatens a contract worth hundreds of thousands or millions of dollars, the difference between a well-drafted clause and vague boilerplate — or between timely notice and no notice — can determine the outcome entirely. At Yassi Law PC, we handle commercial contract disputes across New York City and Long Island, from the initial demand through trial when necessary. If you're dealing with a force majeure dispute or want to review contract language before you sign, call us at 646-992-2138.

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Written by Reza Yassi | LinkedIn

This article is for informational purposes only and does not constitute legal advice. Although I am an attorney, I am not your attorney, and reading this article does not create an attorney-client relationship. Laws vary by jurisdiction and may have changed since the publication of this article. For advice specific to your situation, consult a qualified attorney.