Many small businesses in Florida have commercial leases. An exculpatory clause serves an important purpose in a commercial lease.
The clause aims to shield one party, usually the lessor (landlord), from liability arising from injuries due to negligent acts on the premises.
Enforcing the clause
Courts generally uphold exculpatory clauses if lease agreements explicitly outline them. Clarity in language ensures that the terms of the clause leave no room for ambiguity or misinterpretation.
Limiting enforcement
Upholding an exculpatory clause is unlikely if the injury in question occurred as a result of a violation of law. In other words, if the lessor’s negligent act breaches legal requirements or standards, the exculpatory clause cannot shield the lessor from liability. This limitation is one way to ensure accountability for actions that go against established laws and regulations.
One example could be if the lessor does not maintain the property in compliance with building and safety codes. If the lessor skips the repair of faulty wiring in the building, which subsequently leads to an electrical fire causing injury or damaging a tenant’s business equipment, the exculpatory clause may not protect the lessor.
Small businesses make up 99.8 percent of Florida businesses. Exculpatory clauses are important for them to understand, whether they act as lessors or tenants in a certain situation.
Exculpatory clauses offer a layer of protection for lessors. They also underscore the importance of responsibility and accountability. Both parties must follow their respective obligations and duties in the lease, including maintaining a safe environment and complying with legal requirements. An exculpatory clause does not absolve either party from fulfilling their contractual responsibilities or acting negligently.