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Early termination of commercial lease

Discussion in 'Commercial Landlord & Tenant Issues' started by baptistchen, Aug 22, 2006.

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  1. baptistchen

    baptistchen Law Topic Starter New Member

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    Hi,

    I entered an 3-year contract with my landlord 13 months ago. Due to servere loss of business, I need to terminate the contract early. I read through the agreement, I found the following clause which I need help from someone who can explain it in simple english especially the lower half:

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    Provided Always and it is hereby agreed that if the rent hereby reserved or any part thereof of any deposit as mentioned in Clause 2 shall at any time be unpaid after becoming payable (whether formally demanded or not and in this context it shall be the duty of the Tenant to seek out the Landlord and not vice-versa) or if any covenant on the Tenant's part herein contained shall not be performed or observed or if the Tenant shall become bankrupt or make any assignment for the benefit of their creditors or enter into an agreement or make any arrangements with their creditor for liquidation of their debtors by composition or otherwise then and in any of the said cases it shall be lawful for the Landlord at any time thereafter to re-enter upon the Premises or any part thereof in the name of the whole and thereupon this demise shall absolutely determine or to demand by letter the payment of any such rent or deposit within ten(10) days from the date of the letter and if such rent or deposit still remains unpaid at the expiration of the 10-day period then this Agreement shall be treated as cancelled without prejudice to any right of action of the Landlord in respect of any such rent or deposit or any antecedent breach of the Tenant's convenants herein contained and the Landlord shall be free to dispose of the Premises in any manner he chooses.
    ====================
    Note: This is the only clause that mentions about the termination of contract.

    The landlord told me that I could not simply terminate the contract otherwise he will take legal action on me. I just what to know:
    1. What is my chances of winning the case?
    2. Does the above clause provide advantage over his legal action?

    Please kindly advice. Thank you.
     
  2. Michael Wechsler

    Michael Wechsler Administrator Staff Member

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    Hi there and sorry to hear about your predicament.:(

    I think you misunderstand the clause you've cited -- I don't blame you. It's difficult for lawyers to understand all the run-on sentences too. Here is the key:

    "...then this Agreement shall be treated as cancelled without prejudice to any right of action of the Landlord in respect of any such rent or deposit or any antecedent breach of the Tenant's convenants herein contained and the Landlord shall be free to dispose of the Premises in any manner he chooses."

    This essentially means that the agreement can be canceled by the Landlord and he can sue you on the agreement. It doesn't mean you just go your separate ways. Your best bet would be to find another person to assume the lease -- that is what it gives the landlord the right to do in order to "mitigate" or lessen the damages. He can cancel the lease and force you out, without any problem with you claiming some right or desire to be there, and then try to lease it to someone else.

    I hope this clarifies things... best of luck to you.
     

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