As Governments around the world continue to announce increasingly restrictive measures in the retail and hospitality sectors to try to slow the spread of COVID-19, landlords and tenants are understandably concerned about the effect of such measures on commercial leases. Most commercial leases in Hong Kong are fixed term.
There are three principal ways in which the situation could be dealt with (a) there is a provision in the contract dealing with the situation (such as force majeure); (b) the parties may renegotiate terms to deal with the situation; (c) a party may be in “fundamental breach” of its obligations; or (d) the lease may be frustrated.
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