God the Father by Cima da Conegliano, c. 1515
(Reuters) - A California retail developer
claims the state's coronavirus lockdown was an act of God that prevented
it from completing a $4.2 million property acquisition, asking a court
to prevent owner Exxon Mobil Corp from selling to any other buyers.
Pacific
Collective LLC invoked force majeure in its bid to delay an Exxon
property acquisition, according to a suit filed in Los Angeles County
Superior Court. The legal clause refers to unexpected events that
prevent one party to a contract from meeting its obligations.
Sometimes
referred to as the act of God clause, force majeure is being invoked
elsewhere in energy contracts. BP this month cited force majeure for a
one-year delay on a natural gas project, and three Indian refiners have
cited it in rejecting crude oil imports.
An Exxon spokesman declined immediate comment, citing pending litigation.
Pacific Collective did not reply to a request for comment and an attorney for the firm declined to comment.
The
retail property developer's lawsuit seeks $7.9 million in damages for
alleged breach of contract and an injunction prohibiting Exxon from
selling the property to someone else.
Pacific Collective invoked
force majeure on March 30, a day before the acquisition was to close.
Three days later Exxon notified the developer it would cancel the sale
and keep the company's deposit, according to the lawsuit.
Exxon's
insistence on the scheduled closing required "acts that would qualify as
crimes under the current California and County of LA Stay-at-Home
Orders," Pacific Collective's complaint said.
Coronavirus could
constitute a legal force majeure as long as a company can show it is
effectively impossible to perform contractual duties as a result of the
outbreak, said legal experts.
The case is Pacific Collective LLC V Exxon Mobil, Los Angeles County Superior Court, No. 20-STCV-13294.
(Reporting by Gary McWilliams; Editing by Christian Schmollinger)
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