As some of you have already noted, Las Vegas Justice Court issued Administrative Order 20-03 for dealing with the current situation. The State Bar is trying to keep you updated with closures and changes on its news page.
The City of Reno ordered all non-essential businesses closed. [TNI] A similar order has not been issued for Vegas yet, but it raises an important question: how essential is your business? Is civil work as essential as criminal work? Does it depend on the case? Who should make that determination? Does public health outweigh the right to a speedy trial?
American courts’ failure to respond to the coronavirus could be catastrophic. [Slate]
Attorney Richard Dreitzer talks about labor law in light of the coronavirus. [Vegas Inc.]
Clark County had Nevada’s first coronavirus death yesterday. [RJ]
Hello. I am a General Counsel for a small chain of retail outlets in Nevada. We may have trouble paying our rents due to the Pandemic. I have been researching Force Majeure, impossibility, etc. Can anyone point me in the right direction toward our rights re: leases, etc. during this Pandemic. I was told this Blog is really great so don't let me down. Thanks ahead of time.
We have researched the same thing and here is what our research has found: the law is all over the map, virtually nonexistent in Nevada, most courts simply default to the specific references to the specific language of the lease. Many leases include a specific list of events which are said to constitute force majeure; in our experience virus is on very few of those lists but government shutdown often is. Where there is a general clause or matters outside of the parties' control, COVID-19 would seem to be an event outside of a party’s control and is therefore likely to come within the definition of force majeure.
Not 10:52 here, but it's going to depend a lot on the specific language used in each contract or lease and reading provisions in context, if there is a force majeure clause. There will be a lot of disputes over whether things are or are not within the scope of a force majeure clause.
Without a force majeure clause, parties will be stuck with common-law doctrines of commercial impracticability, frustration of purpose, or impossibility. Those doctrines are much, much less friendly to excusing contractual performance.
Start negotiating now. Landlords have bills to pay, too.
The big question is whether the banks will play nice. The Fed is gushing liquidity and pushed the bank reserve requirement to zero, so they have no reason to be anything but cooperative with everyone. Pray that another plundering ruthless Rialto is not unleashed on us.
We have already been down the Business Interruption path also. Virus is not a covered loss. However governmental interference/shutdown often is. The problems is BOP/business interruption claims are going to be so massive that it will destroy insurance companies if they are required to pay claims.
Well.. tough. That's why they charged premiums. It's a risk-shifting model. I don't want the risk, so I paid them to take the risk for me. They don't get to run away now that the chance of something interrupting my business suddenly shot up. See, for example, Hurricane Sandy.
Read your business interruption policy. Most exclude viruses. So you paid for them to take listed or non-excluded risks, of which this is most likely an excluded risk.
All good responses here I think. We too are addressing these for clients. If force majeure clause is drafted to capture this moment, you may still have notice obligations and this might give rise to eventual termination right for the other side. If it's not captured under the force majeure, you might risk anticipatory repudiation argument if you or they can't perform. In some instances (though probably not yours), there may be some conditions that are implicated here that permit delayed or changed performance. Also, if folks are on the same page but the language doesn't really fit, there typically is a waiver that can be crafted. Lastly, if everything goes your way and you have an force majeure out, be sure you consider unintended consequences for other contracts (like financing arrangements). Hope that additional stuff helps.
OP here, thanks again. So I advised them that we should speak to each landlord and try to negotiate something that works for both but be aware that we do have some legal arguments should things fall apart. Retail is tough (not that others aren't suffering as well) because the business went from great business to practically a ghost town as they say. I guess I'm just venting at this point but like most on this blog, I have family and children and do not look forward to getting laid off or terminated or whatever. In fairness to my employer, what are they supposed to do with all their employees with practically zero business. Anyway, thanks again, and I hope we all can make it through this.
Guest
Anonymous
March 17, 2020 6:11 pm
9:06 here – thank you both. If my research finds anything worthy of help to you I'll post it here.
Guest
Anonymous
March 17, 2020 8:30 pm
What about nevada Secretary of state, my renewal is due? Are they operation g online? I don't want to be penalized if not.
The Bay Area orders excluded "Professional services, such as legal or accounting services, when necessary to assist in compliance with legally mandated activities." You can make of that what you want.
Hello. I am a General Counsel for a small chain of retail outlets in Nevada. We may have trouble paying our rents due to the Pandemic. I have been researching Force Majeure, impossibility, etc. Can anyone point me in the right direction toward our rights re: leases, etc. during this Pandemic. I was told this Blog is really great so don't let me down. Thanks ahead of time.
We have researched the same thing and here is what our research has found: the law is all over the map, virtually nonexistent in Nevada, most courts simply default to the specific references to the specific language of the lease. Many leases include a specific list of events which are said to constitute force majeure; in our experience virus is on very few of those lists but government shutdown often is. Where there is a general clause or matters outside of the parties' control, COVID-19 would seem to be an event outside of a party’s control and is therefore likely to come within the definition of force majeure.
Not 10:52 here, but it's going to depend a lot on the specific language used in each contract or lease and reading provisions in context, if there is a force majeure clause. There will be a lot of disputes over whether things are or are not within the scope of a force majeure clause.
Without a force majeure clause, parties will be stuck with common-law doctrines of commercial impracticability, frustration of purpose, or impossibility. Those doctrines are much, much less friendly to excusing contractual performance.
Start negotiating now. Landlords have bills to pay, too.
The big question is whether the banks will play nice. The Fed is gushing liquidity and pushed the bank reserve requirement to zero, so they have no reason to be anything but cooperative with everyone. Pray that another plundering ruthless Rialto is not unleashed on us.
Similar issues with business interruption coverage. Most policies attempt to exclude.
We have already been down the Business Interruption path also. Virus is not a covered loss. However governmental interference/shutdown often is. The problems is BOP/business interruption claims are going to be so massive that it will destroy insurance companies if they are required to pay claims.
Well.. tough. That's why they charged premiums. It's a risk-shifting model. I don't want the risk, so I paid them to take the risk for me. They don't get to run away now that the chance of something interrupting my business suddenly shot up. See, for example, Hurricane Sandy.
Read your business interruption policy. Most exclude viruses. So you paid for them to take listed or non-excluded risks, of which this is most likely an excluded risk.
All good responses here I think. We too are addressing these for clients. If force majeure clause is drafted to capture this moment, you may still have notice obligations and this might give rise to eventual termination right for the other side. If it's not captured under the force majeure, you might risk anticipatory repudiation argument if you or they can't perform. In some instances (though probably not yours), there may be some conditions that are implicated here that permit delayed or changed performance. Also, if folks are on the same page but the language doesn't really fit, there typically is a waiver that can be crafted. Lastly, if everything goes your way and you have an force majeure out, be sure you consider unintended consequences for other contracts (like financing arrangements). Hope that additional stuff helps.
OP here, thanks again. So I advised them that we should speak to each landlord and try to negotiate something that works for both but be aware that we do have some legal arguments should things fall apart. Retail is tough (not that others aren't suffering as well) because the business went from great business to practically a ghost town as they say. I guess I'm just venting at this point but like most on this blog, I have family and children and do not look forward to getting laid off or terminated or whatever. In fairness to my employer, what are they supposed to do with all their employees with practically zero business. Anyway, thanks again, and I hope we all can make it through this.
9:06 here – thank you both. If my research finds anything worthy of help to you I'll post it here.
What about nevada Secretary of state, my renewal is due? Are they operation g online? I don't want to be penalized if not.
@ 1:30
You can pay online. Login to SilverFlume, presumably aptly named because it is a flume of silver (money) to the State treasury.
I thought it was called SilverFlume because it uses technology that moves at the speed of Comstock Lode times.
Sisolack is going to close all non-essential businesses. Bets on whether this includes or excludes law firms?
The Bay Area orders excluded "Professional services, such as legal or accounting services, when necessary to assist in compliance with legally mandated activities." You can make of that what you want.
How could you say law firms must close but Courts can stay open?
Are dispensaries going to be deemed "non-essential"?