A reader who failed to renew his lease within the stipulated time wants to know whether he can be asked to vacate the premises for what he feels is a minor error.
He operates a retail shop from the building and due to the financial state of the business was not sure whether renewing the lease would be wise.
In addition, he thought the landlord would not be in a hurry to lease the building to a third party as the location is not particularly desirable.
See the reader’s question here.
Consequently, he thought he would make a last-minute decision as to whether he should renew the lease.
He says he is aware of the lease provisions that require a specified period of notice and intended to contact the landlord prior to this.
But he failed to do so and, upon realising that he missed the deadline, contacted the landlord to discuss the renewal.
The landlord advised that either he or his attorney would be in contact with him.
The landlord’s attorney subsequently sent correspondence confirming that the lease had expired and that the reader, having failed to timeously renew the lease, is to vacate the building at the termination of the agreed period.
The reader has rented the building for a considerable period and, having been there for so many years, thought it would be assumed that he would continue with the lease if he did nothing.
Dealing with the interpretation of contracts and the concept of fairness can be tricky.
A contract is concluded for the very purpose of achieving certainty as to its provisions to avoid dispute.
The provisions of a contract must be complied with in accordance with the maxim pacta sunt servanda (agreements must be kept).
A court will typically only consider permitting a deviation from the provisions of a contract in limited circumstances, often as a result of the application of considerations of public policy.
In the 2019 Supreme Court of Appeal matter of Oregon Trust v BEADICA, the court found that there was nothing unreasonable about the renewal clauses in question in a matter which was also about a failure to timeously renew a lease.
In brief, the tenant argued that public policy dictated it was unjust for the lease to be terminated as it would lead to the possible collapse of the business and failure of an empowerment vehicle for previously disadvantaged individuals.
The tenant had delivered its renewal late, with no reason for the late attempt being offered.
The court commented that it was the tenant who had jeopardised its own business through its own conduct.
In the 2018 Supreme Court of Appeal matter of AB v Pridwin Preparatory School, the court set out the principles governing public policy and private contracts.
The summary stated that public policy demands that contracts freely and consciously entered into must be honoured.
A court will declare invalid a contract that is prima facie harmful to a constitutional value or principle or otherwise contrary to public policy.
Where a contract is not prima facie contrary to public policy, but its enforcement in particular circumstances is, a court will not enforce it.
The summary states that the onus is on the party who attacks the contract or its enforcement to establish the facts.
A court will use the power to invalidate a contract, or not to enforce it, sparingly and only in the clearest of cases in which harm to the public is substantially incontestable and does not depend on the idiosyncratic inferences of a few judicial minds.
A court will decline to use this power where a party relies directly on abstract values of fairness and reasonableness to escape the consequences of a contract because they are not substantive rules that may be used for this purpose.
In consideration of these judgments, it would seem that the reader, especially in light of the arguably flimsy justification provided for his delay in renewing the lease, would not be in a good legal position to challenge the landlord’s refusal to entertain a renewal outside of the contractual provisions.
The reader could perhaps try to appeal to the landlord based on their historical relationship.
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