NOAH SYNDERGAARD and FORCE MAJEURE
The current crisis over COVID-19 has initiated a newfound legal interest in the doctrines of “force majeure” and frustration of purpose. A contract is a contract unless there is an unanticipated event (such as a pandemic), which makes performance of the contract impossible by one of the parties. The consequences of the unanticipated event also has to be out of the control of the party seeking to avoid a contract.
In February 2020, Noah Syndergaard, a star pitcher for the New York Mets, signed an eight-month lease for a Tribeca apartment. The 2,700-square foot duplex apartment included three bedrooms, three large terraces and architectural finishes. The rent was $27,000 per month.
Syndergaard was scheduled to move in March 20, 2020, but he never did. Syndergaard was notified on April 17, 2020 that he was in default of his obligations under the lease. Upon receiving the default notice, Syndergaard, through his attorneys, responded that the landlord, 600 Summer Street, LLC (“600”) was free to re-lease the premises and that he had no intention of ever taking possession of the apartment. The apartment remains vacant.
On or about May 22, 2020, 600 filed a lawsuit in the Southern District of New York, claiming that Syndergaard treated the lease as an option, never paid anything on the lease and refused to take possession. 600 is seeking $250,000 in damages, or the full amount due and owing under the lease plus attorneys’ fees. Syndergaard offered the landlord $50,000 to cancel the lease.
Given the COVID-19 pandemic, Syndergaard could interpose “force majeure” and frustration of purpose as defenses to payment of the $250,000. Syndergaard expected to acquire a New York residence during the 2020 baseball season. Since the pandemic has interfered with the potential for this season, Syndergaard could claim that he is relieved from his obligation to perform the lease-contract by “force majeure” or an outside event rendering his performance impossible. Also, Emergency Orders by New York State requiring “stay at home” made the 2020 baseball season delayed at best, and cancelled at worst. Syndergaard’s entire reason for signing the lease was thus thwarted by events and people outside of his own control.
Frustration of purpose is similar in that Syndergaard could argue that his purpose in renting the apartment was to participate in the baseball season in New York. Due to events beyond his control, this season remains problematic.
Force majeure is a defense to performance under a contract. Typically, force majeure clauses list the type of events which could possibly interfere with performance. New York will interpret a force majeure clause in a contract pursuant to its express terms. See Constellation Energy Services of New York, Inc. v. New Water Street Corp., 146 A. D. 3d 557, 46 N.Y.S. 3d 25 (1st Dep’t 2017) (deconstructing a force majeure clause in a contract whose performance was affected by Hurricane Sandy). Force majeure clauses in commercial contracts may list “pandemics” as a potential performance problem. A review of New York cases does not indicate that such a pandemic clause has been recently invoked. Without a copy of Syndergaard’s lease, it cannot be determined if any force majeure clause was included therein.
The defenses of force majeure and frustration of purpose are closely linked. While force majeure is a stated contract term, frustration of purpose and/or impossibility of performance may arise in circumstances where the parties are aware of the purpose for the contract and that purpose has been sidelined by events out of the contracting parties’ control. See Goldstein v. Orensanz Events, LLC, 2017 NY Slip Op 00125, p.1 ( 1st Dept. 2017)( holding that courts will interpret a force majeure clause …”where the reasonable expectation of the parties and the performance of the contract have been frustrated by circumstances beyond the control of the parties”). See also Bush v. ProTravel International, Inc., 192 Misc2d 743, 746 N.Y.S. 2d 790 (Civ. Ct. Richmond Co, 2002) ( holding that government action after September 11, 2001 made travel “either forbidden altogether or severely restricted” and could permit plaintiff to cancel an African safari on short notice).
It would be unusual for a residential lease such as the lease signed by Syndergaard to include a force majeure clause. Given the Executive Orders in place after Syndergaard signed the lease and the tenuous situation with regard to the 2020 baseball season, Syndergaard could invoke certain defenses to payment of the lease which would not be available without the emergence of COVID-19.
~ Davida Scher
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