Real Estate Contracts and the Force Majeure Clause

The real estate market is booming right now. Sellers are scrambling to get their properties on the market while buyers face fierce competition, often resorting to cash offers over the asking price. The result is often a lightning-fast round of negotiation in hopes of winning the contract. Unfortunately, in the haste to secure the deal, it can be easy for sellers and buyers to lose focus of how important their real estate contract terms are.

All real estate contracts must be in writing and contain certain provisions, including:

  • An identifying description of the parties
  • A legal description of the property
  • The purchase price of the property
  • Legal consideration and mutual assent

In addition to the terms listed above, many real estate contracts contain a force majeure provision. The force majeure clause protects parties who cannot perform their contractual obligations due to circumstances beyond their control. Often, circumstances that invoke force majeure are labor strikes, raw materials shortages, riots, natural disasters, and “acts of God.”

Including Specific Pandemic Language in Force Majeure Provisions

In the current seller’s market, buyers are rushing to have their offers accepted at increased risk to them. Similarly, sellers are eager to close as quickly as possible. Any contract provision that can bolster protection to the real estate contract parties is important, and the force majeure term adds that extra protection. So where does Covid-19 fit into the force majeure clause?

The virus has certainly contributed to raw materials shortages and is arguably an act of God. Yet, in most states, force majeure provisions are construed narrowly. This means that traditional force majeure language may be too vague to offer protection from pandemic-related breaches of real estate contracts. If you live in an area that’s experiencing ongoing Covid-19 impacts, then it may be wise to bolster your real estate contract with force majeure language that specifically includes words like “pandemic” or “disease.”

In today’s real estate market, the Attorney’s Title Group team knows that you need to move through the closing process efficiently and effectively without sacrificing your contractual protections. Please call us at (501) 734-2233, or email us at if you have any questions!