What does the term "force majeure" refer to in lease agreements?

The term "force majeure" refers specifically to unforeseen events or circumstances that are beyond the control of the parties involved in a lease agreement, and that may excuse or delay a party from fulfilling their contractual obligations. Common examples of force majeure events include natural disasters like hurricanes or earthquakes, wars, or other significant incidents that prevent performance as agreed.

In a lease context, if a force majeure event occurs, it can limit liability for a party that is unable to meet terms due to those extraordinary conditions. This concept is critical in contracts, as it recognizes that not all events can be predicted or controlled, thus offering protection to parties who might otherwise be penalized for circumstances beyond their control.

The other choices instead address different aspects of lease agreements, such as financial adjustments, lease renewal terms, or insurance requirements, which do not encapsulate the essence of what force majeure entails. Understanding this term is vital in interpreting lease agreements and the responsibilities of each party during unforeseen occurrences.