The recent decision of the Supreme Court of England and
Wales in the case ofMarks and
Spencer plc v BNP Paribas Services Trust Company (Jersey) Limited
and another poses important points
to be considered by commercial landlords, tenants and
agents;and reinforces the
importance of clear and precise
wording in commercial leases.
In a series of leases where the
rent was payable on the usual quarter days, M&S sought to
recover the rent they had paid after exercising a break clause and
seeking to terminate their lease mid-quarter.
As the lease did not include a
specified term, they were unable to recover the rent they had paid
after the break date to the next rent date.
On appeal to the Supreme Court, the
court found that as there was no clear wording and the break date
was a conditional break, it had to consider whether it could imply
apportionment. The court ruled that implying terms was only
possible if the contract could not function without that term or it
was so obvious that it goes without saying.
In the circumstances reimbursement
of the rent was not permitted.
Collas Crill's Pan Island Head
of Property, Jason Green commented: "In today's
challenging economic climate, with landlords anxious to maintain
rental income, it is not surprising that break clauses have
resulted in an increase in litigation in recent years. This
case highlights the need for careful and consistent drafting that
covers all the points agreed between the parties. You cannot rely
on the court to imply a term – it needs to be there in black
and white if you want to rely on it. This case also has
ramifications for all contracts - not just leases."
Paul Harben, Partner and Head of
Jersey Property said: "It's vital when drafting and
negotiating a break clause to include an express term regarding the
reimbursement of rent and to leave no ambiguity as to when the
break date is. Otherwise, a tenant can be faced with the options of
facing the financial sting of paying for premises they have given
up or breaching their lease terms, neither represent a particularly
equitable or practical solution."
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The process for obtaining planning permission for development of property in the Cayman Islands has been updated as a result of the latest revision of the Development and Planning Law and accompanying regulations (July 2015).
In principle, when the parties agree to arbitrate, they shall be
bound by that agreement. It should therefore follow that when a
party initiates arbitration proceedings, the other party - the
respondent – will avail itself of the opportunity to present
its case and participate in the proceedings.
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