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In what could be the first of many similar lawsuits, a retail and development company is using the force majeure argument after claiming the coronavirus pandemic stalled its attempt to buy property from Exxon Mobil, according to reports.
Pacific Collective, a Los Angeles-based retail developer and investor, is suing Exxon Mobil after Exxon pulled out of a $4.2M real estate deal, Reuters reported.
According to Reuters, the day before the agreement was slated to close, Pacific Collective invoked force majeure, a standard clause in contracts referring to an "act of God" that prevented it from fulfilling its end of the deal.
Exxon pulled out of the deal a few days later and kept Pacific’s deposit, the lawsuit says.
Pacific Collective filed suit, asking for $7.9M after claiming Exxon breached the contract. It is also seeking an injunction prohibiting Exxon from selling the property to another party.
Exxon and Pacific Collective declined to comment.
Pacific Collective's could be the first of many force majeure lawsuits in commercial real estate.
The global coronavirus pandemic has hit the real estate industry hard, leaving many deals in limbo, construction sites empty and several businesses forced to close.
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