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ARTICLE · 22 JULY 2021

Do COVID-19 lockdowns frustrate leases?

Holding Redlich
Holding Redlich
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COVID-19 and related lockdowns are unlikely to frustrate leases and other land-based contracts.

AustraliaCoronavirus (COVID-19)
Bede Haines
Bede Haines
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The past weekend's expanded greater Sydney shutdown may have you wondering about frustration and lockdowns. Can a tenant, who is legally unable to trade, reasonably argue the lockdown has frustrated their lease, bringing it to an end? Can a landlord do likewise? In short - no, and we explain why below. 

Frustration

A frustrating event terminates a contract, not at a party's election, but automatically. Such an event, and if not caused by a party's default, must create a 'radically different' environment from that originally contemplated. This includes where the contract's performance becomes impossible, suggesting a possible analogy with the current COVID-19 lockdowns. Take, for example, a cinema chain banking on weekends of decent box office and snack sales, only to miss out on showing Black Widow, and maybe soon Top Gun: Maverick.

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This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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