The standard purchase agreement does not contain a Force Majeure (more commonly known as an “Act of God”) clause which provides for an extension of the closing date should a hurricane or other natural disaster prohibit the parties from closing on time.

During hurricane season you should consider adding the following language to your purchase agreement:

“Should a hurricane or tropical disturbance in the Gulf of Mexico prevent the timely closing of a sale or the binding of insurance, all parties agree to and here by extend the act of sale to a date within ______ days after insurance can be bound and closing services are available, provided said date does not exceed 14 days.”

We recommend a time frame of 5 – 7 days for the blank.

Remember that insurance companies may not bind insurance when there is a named storm in the Gulf of Mexico. The “box” starts at 20° North Latitude and 80° West Longitude.

Communication is critical during a hurricane threat. Remind your buyers to speak with their lender and insurance agent about any impacts an approaching storm will have on their closing and what their options are.

If you have any questions, please don’t hesitate to call or email.

Jason