Force Majeure Clause And COVID Lockout: Court Sides With Tucson Nightclub Owners

The owners of a former downtown Tucson nightclub recently were awarded $1.6 million after suing their landlord for locking them out during the COVID-19 pandemic in 2020.

The case was a local test of so-called ‘force majeure’ contract provisions, which can relieve parties of their contractual obligations for situations beyond their control.

Congress Street Clubs LLC, former owner and operator of Zen Rock nightclub located on East Congress Street, said it was legally forced to close its doors under state order in March 2020.

In a lawsuit filed in September 2020 in Pima County Superior Court, Congress Street Clubs said that despite the contract clause, its landlord, 111-121 E. Congress LLC, demanded that the club remain open and operating or face eviction.

The company contended the lease’s force majeure clause excused its obligation to pay rent while forcibly closed by Gov. Doug Ducey’s COVID-19 lockdown executive orders, and sued the landlord for breach of contract for failing to recognize the clause.