Can a Force Majeure Clause Extend a Commercial Lease in Ontario?

What Is a Force Majeure Clause in a Commercial Lease?

A force majeure clause is a contract provision that excuses one or both parties from performing their obligations when an extraordinary event beyond their control makes performance impossible. In commercial leases, these clauses often list triggering events such as natural disasters, government orders, or “restrictive laws.” When a qualifying event occurs, the clause typically suspends the affected obligation and extends the time for performance by an equivalent period.

Not all force majeure clauses are the same. The exact wording determines what events qualify, which obligations are affected, and what remedy applies. That is why courts look closely at the specific language of each contract.

Did COVID-19 Government Closures Trigger a Force Majeure Clause?

Yes — at least where the lease’s force majeure clause covered “restrictive laws” and the primary purpose of the tenancy was in-person operation of a specific type of business. In LAF Canada Company v. Woodbine Highway 7 Retail Inc., 2026 ONCA 708 (CanLII), the Court of Appeal for Ontario confirmed that government-mandated pandemic closures triggered the force majeure clause in a commercial lease for a fitness facility in Markham.

The tenant operated a health club and fitness facility on the leased premises. During the pandemic, government restrictions forced the facility to close for 348 days. The tenant kept paying rent throughout that period. The court found that the closures prevented the landlord from fulfilling its core obligation — providing premises that could actually be used for the in-person fitness operations the lease contemplated — and that the force majeure clause therefore extended the lease term by 348 days, with no additional rent owed.

Does the Landlord Have to Do Something Wrong for Force Majeure to Apply?

No. The Court of Appeal made clear that a landlord does not need to have breached the lease or taken any deliberate step to block the tenant’s business. The question is not whether the landlord caused the problem, but whether an outside event prevented the landlord from delivering what the lease required.

The landlord in this case argued that it had done nothing wrong — it never locked the doors or prevented access. The Court rejected that framing. The landlord’s obligation was to provide premises fit for use as an in-person fitness facility. Government restrictions made that impossible. The absence of any intentional act by the landlord was irrelevant to whether the force majeure clause was triggered.

Could the Tenant Have Used the Space for Something Else Instead?

The landlord suggested the tenant could have pivoted to virtual fitness programming and continued using the space in that way, which would have meant the force majeure clause was never triggered. The Court dismissed this argument.

The lease defined the primary use of the premises as the operation of a health club and fitness facility within the premises — meaning in-person, on-site activity. Switching to virtual classes would have been inconsistent with the plain text of the lease and with what both parties objectively intended when they signed it. The lease even gave the landlord the right to terminate if the tenant stopped operating for more than 180 days, with an exception for force majeure events — a provision that only makes sense if both sides understood the tenancy to involve in-person business.

How Does This Decision Fit With Earlier Ontario Case Law?

The Court relied heavily on its earlier ruling in Niagara Falls Shopping Centre Inc. v. LAF Canada Company, 2023 ONCA 159, which involved the same tenant, a similar lease, and the same COVID-19 restrictions. That earlier decision established that government-ordered closures could trigger a force majeure clause by preventing a landlord from providing premises for their contracted use — even without any affirmative interference by the landlord.

The landlord argued Niagara was wrongly decided and should not apply. The Court disagreed, finding the reasoning in Niagara sound and directly applicable. The landlord’s attempts to distinguish other COVID-era commercial lease cases were also rejected, because those cases turned on different facts — such as a party that could still have met its contractual obligation despite the restrictions, or a dispute about quiet enjoyment rather than a force majeure clause.

What Does This Mean for Commercial Landlords and Tenants in Ontario?

For tenants, this decision reinforces that a well-drafted force majeure clause can provide real protection when government action prevents the use of leased premises for their intended purpose. Where a lease defines a specific primary use and a qualifying event prevents the premises from being used that way, the force majeure clause may excuse performance and extend the lease term for an equivalent period. In this case, because rent had already been paid for the closure period, the tenant owed no rent for the 348-day extension.

For landlords, the decision is a reminder that force majeure clauses in leases are binding in both directions. A landlord’s obligation is not simply to hand over a set of keys — it includes providing premises that can actually be used for the purpose the parties contracted for. Our Ontario litigation lawyers regularly advise both landlords and tenants on commercial lease disputes, including questions about force majeure, rent obligations, and lease interpretation.

Businesses in the Greater Toronto Area and across Ontario — including those in Toronto and Mississauga — who are navigating commercial lease disagreements will want to review their specific lease language carefully in light of decisions like this one.

Questions and Records to Discuss With a Lawyer

• Does your commercial lease contain a force majeure clause, and what events does it list as qualifying triggers?
• What does your lease say about the primary permitted use of the premises, and how specifically is that use defined?
• Did you continue paying rent during a period when government restrictions prevented you from operating as contemplated by the lease?
• Are there any time limits in your lease — or under applicable law — that could affect your ability to raise a force majeure argument now?
• What documentation do you have of the government orders that applied to your business and the duration of any closures?

If you have questions about a commercial lease dispute or want to understand how force majeure clauses might apply to your situation, you are welcome to reach out to UL Lawyers through our contact page.

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This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.