Commercial Lease Early Termination Lawyers - Case Study Example

Case study No 3 1. Assignment of contract This is known as assignment. Thus Big Ben Inc needs to assign its contracts with its customers to Jettison. Big Ben Inc becomes the assignor and Jettison becomes the assignee. This assignment must be absolute in that there should be no other conditions between the assignor and its own customers whose dues are being assigned. (Duhaime) Jettison must ensure that there is no restrictive clause for assignment in the original contract and have an assignment contract separately prepared by Big Ben Inc in favor of Jettison setting out the details of dues from each customer which Jettison should present to the customers concerned demanding payment of dues under the original contract with Big Ben Inc. Thus the Big Ben’s customers must accept the assignment and recognize Jettison as the assignee as soon as Jettison’s notice of assignment is received. Once the assignment is made, Big Ben Inc loses its right to receive the benefits from the original contracts. Yet, Big Ben Inc shall remain liable for performance of the contract by its debtors to the assignee. The format in which the assignment may be made is shown in the Appendix 1 2. Lease Agreement A commercial lease is terminable before the end of the lease term provided there is a provision in the lease agreement for premature termination. There can be clauses in the lease agreement without liabilities. They are break-clause, assignment, breach of lease agreement, and agreement. In this case, there seem to be no such clauses in the agreement between Jettison and its landlord. Thus in the event of Jettison’s breaching by ending the agreement, the non-breaching landlord can claim damages for the breach. Generally lease agreement would contain a fixed sum of money as damages as liquidated damages since measurement of damages is often a difficult process. (law-library) However in the instant case, the damages can be calculated by potential loss of lease income to the landlord for the period of default by the lessee. At the same time the lessor is not precluded to lease it out for the period he claims damages for. Hence, it is advisable for Jettison to retain the lease and look out for sublease or assignment for the rest of the period by a fresh understanding with the landlord or if the existing agreement provides for notice period to quit before the expiry of the lease, then the land lord need to be paid only for such period for which notice is required to be given by the lessee. As for the oral agreement for the snowmobiles renting, Jettison can lawfully deduct the rental owed by the landlord for the snowmobiles used by him during the winter months. Since payment of damages rests with Jettison, Jettison can make use of the opportunity to recover rent for snowmobiles @ $ 250 per month. 3. The terms of employment proposed to Sara by Big Bucks are reasonable except for the duration of employment and the last one which is a covenant not to compete (CNC) if it is against public policy and without consideration. The area limits and time duration within which the ex-employee should not be employed should be reasonable. Big Bucks’ terms of “within the city” is reasonable but not “within the county of Denver”. Similarly five years of non-employment is too long a period, having due regard to the fast paced changes taking place in commerce. Further, the employment offer itself is only for one year. Compared to the period of employment offered, the restriction is not reasonable. . Hence Sara would be well advised not to accept the offer. Since the offer of employment is only oral and not written, there is no way she can take it up with labor authorities. However, unless the contract is in written form, Big Bucks cannot enforce it either. Hence, if it is an irresistible offer for Sara, she can enter into contract with Big Bucks and later have the labor authorities advise Big Bucks to modify the contract. In fact certain States like California are totally against such CNCs. The following observation “A covenant not to compete is enforceable only if it is necessary to protect a legitimate business interest, reasonably limited in time and space, and consonant with the public interest.” in Lunt v. Campbell (2007) is may be noteworthy. Kevin case. Kevin is liable to the customer who slipped on the floor, under tort, for having been negligent enough in not keeping the area tidy. Though it may be argued that customer arrived before the business hours, it is not a valid defense since any other visitor who is not a customer or who may be an employee would also have been slipped. Hence, as the business owner, he owes a duty of care to the visitors at his place. Similarly, the woman customer who chocked while consuming the sandwiches took big bites against the advice not to do so. The fact that Kevin’s co partner did not do any thing to help the choking woman does not alter the situation since the co-partner’s was not an act of negligence. To expect the customers to help the choking woman cannot be legally called into question. However, the paramedic who passed by rescued her. The whole episode was totally unforeseen and they were not in any way negligent. Suppose she had taken the sandwich home and got chocked on taking the bib bites, it would have been entirely beyond Kevin’s control. Hence, Kevin, his partner, the paramedic or the customers are not at all liable for what happened to the woman. On other hand, it becomes clear that the woman is an abnormal personality evidenced by her retaliatory actions of distributing fliers containing false information. She also slapped Kevin when he tried to resist her by telling her not to distribute. The woman who wanted to sue Kevin and others, chose to resort to her retaliatory action which was wholly unwarranted. Hence, while Kevin and others are not liable under tort, the woman is liable for her criminal actions of slapping Kevin and defaming him. The principles of duty of care and the neighborhood were enunciated in Donoghue v Stevenson (1932). As for Kevin liability for the incident at the Internet café, he seems to be liable unless he can show who did the mischief. In his own interest, he should have recorded the identity o f the visitors to the cyber café. As has failed in his duty of care to collect the particulars of the person who did the mischief, he is liable for his negligence under tort. On the other hand, if he knows the identity of the mischief maker and have him prosecuted, he will be precluded from the liability by proving his innocence. References Donoghue v. Stevenson [1932] All ER Rep 1; [1932] AC 562; House of Lords Duhaime, Part 6: Restraint of Trade, Assignment, Novation & Frustration, retrieved http://duhaime.org/LegalResources/Contracts/LawArticle-91/Part-6-Restraint-of-Trade-Assignment-Novation-Frustration.aspx>6 December 2009 Law-Library, Commercial Lease Early Termination Lawyers, retrieved 6 December 2009 Lectlaw.com, Assignment of Contract Form, retrieved 6 December 2009 Lunt v. Campbell, No. 07-3845-BLS, *5 (Super. Ct Sept. 2007), quoting Boulanger v. Dunkin’ Donuts Inc., 442 Mass. 635, 639 (2004), citing Marine Contrs. Co. v. Hurley, 365 Mass. 280, 287-88, 289 (1974) and All Stainless, Inc. v. Colby, 364 Mass. 773, 778 (1974). Appendix 1 “ASSIGNMENT OF CONTRACT FOR VALUE RECEIVED, the undersigned Assignor hereby assigns, transfers and sets over to Jettison (Assignee) all rights, title and interest held by the Assignor Big Ben Inc in and to the following described contract: ---------------------------------------------------------------------------- The Assignor warrants and represents that said contract is in full force and effect and is fully assignable. The Assignee hereby assumes and agrees to perform all the remaining and executory obligations of the Assignor under the contract and agrees to indemnify and hold the Assignor harmless from any claim or demand resulting from non-performance by the Assignee. The Assignee shall be entitled to all money remaining to be paid under the contract, which rights are also assigned hereunder. The Assignor warrants that the contract is without modification, and remains on the terms contained. The Assignor further warrants that it has full right and authority to transfer said contract and that the contract rights herein transferred are free of lien, encumbrance or adverse claim. This assignment shall be binding upon and inure to the benefit of the parties, their successors and assigns. Signed this 6th day of December, 2009 Big Ben inc (Assignor) ____________________________ Assignor Jettison (Assignee)” ____________________________ (Lectlaw.com) Read More