Corporate & Commercial

In principle the answer to this question is yes, however for a definite answer the provisions of the lease agreement and all of the circumstances of the particular case need to be considered.

The lease agreement usually stipulates in which cases the lease relationship may be terminated at the will of the lessee. The Business Buildings and Business Premises Act (ZPSPP) must also be taken into consideration, as it contains a number of obligatory provisions regarding the leasing of business premises and termination of the lease relationship between the parties. In view of the obligatory provisions of the ZPSPP, it is also important whether the lessee has concluded a lease agreement for a fixed or for an indefinite period, since the ZPSPP regulates the respective types of contracts differently.

As ZPSPP stipulates that a lease agreement which is concluded for an indefinite period must be judicially terminated with a one-year notice period and that a lease agreement which is concluded for a fixed term generally cannot be terminated before the expiration of the term for which it is concluded, it is from the lessee’s point of view due to the consequences of the declared epidemic all the more important that the Obligations Code (OZ) regulates the legal construct of changed circumstances.

This legal construct allows that in case if after the conclusion of a contract circumstances arise that render the performance of obligations by one party more difficult or owing to which the purpose of the contract cannot be achieved and in both cases to such an extent that the contract clearly no longer complies with the expectations of the contracting parties and in the general opinion it would be unjust to retain it in force as it is, the party whose obligations have been rendered more difficult to perform or the party that owing to the changed circumstances cannot realise the purpose of the contract may request the rescission of the contract.

However, the lessee can only invoke the legal construct of changed circumstances if he at the conclusion of the lease agreement could not have foreseen or taken into account the occurrence of the current circumstances or could not have avoided them or could not have prevented the consequences thereof.

The key question that the court will have to answer in such disputes is therefore whether the occurrence of an epidemic and the inability to conduct business activity are risks that the lessee would have to take foresee and take into account when concluding the lease agreement. It is equally as important whether the lessee during the epidemic did everything to avoid or mitigate as much as possible its negative consequences.