Rinehart entered into a commercial real estate lease contract with Advance America. The contract stated that the

Question:

Rinehart entered into a commercial real estate lease contract with Advance America. The contract stated that the sole purpose of the rental was to operate a check-cashing facility. The contract also stated that if permits to operate a checkcashing facility could not be obtained within 90 days of executing the contract,

the lease would be terminated. The language in the contract stated:

In the event Tenant, after using best efforts, is unable to obtain all permits and approvals necessary for Tenant to open and operate its business in the Premises within ninety (90) days from the mutual execution of this Lease,

Tenant shall have the right, upon written notice to Landlord, to terminate the Lease. . . .

The court affirmed the provision in the contract since the city did not provide a permit for operating a check-cashing facility on the property.

CASE QUESTIONS

1. The appellate court stated that the trial court had incorrectly applied the doctrine of frustration of purpose to this case. Explain why this was a mistake.

2. The landlord argued that the 90-day window applied to terminating the lease, not to obtaining a permit, and that the tenant had failed to terminate the lease within 90 days. Based on the language in the contract, is this persuasive?

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Related Book For  book-img-for-question

Business Law And Strategy

ISBN: 9780077614683

1st Edition

Authors: Sean Melvin, David Orozco, F E Guerra Pujol

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