Dorothy Deng is a successful real estate mogul in Upstate New York. She owns a number of properties,

both commercial and residential and all for rent. One property in particular on the East side of the City

of Syracuse had underperformed compared to the rest of her portfolio. This property was a three-story

building that overlooked the beautiful campus of Syracuse University, her alma mater. This

commercially zoned piece of property was the corporate home to Dorothy's empire and her staff and

she used most of the building; however, there was room for some commercial activity on part of the

first floor. In an effort to improve the profitability of the property, Dorothy enlisted the assistance of

Lauren Shaw, a licensed real estate agent and real go getter. Lauren sold Dorothy on the fact that she

would find a tenant for this property.

Meanwhile, Samuel Turecamo was an entrepreneur who had opened a day salon in the city of Syracuse

that was meeting with great success. Sam had a nice business providing spa services to business

professionals located in the heart of downtown Syracuse. Both men and women frequented the salon

where they could get any number of pampering services. However, Sam noted that the lack of parking

and the lack of residential housing in the city of Syracuse limited his income potential. If he could find a

place near the city but near people with money and off-street parking, he could increase his revenues

and profits.

At a chance meeting at the Inn Complete bar after an SU hockey game, Sam, an SU alum, met his old LPP

255 classmate, Lauren also an SU alum, and hockey fan. The two conversed about the great time they

had in school especially their favorite professor who taught them law and public policy and SOM122.

During the conversation, they got caught up on what each other was doing and the lightbulb went off.

Lauren realized that she might be able to get Sam to lease the space that Dorothy had to offer. The

location was perfect! After a few more refreshments and a cheeseburger, they agreed to meet the next

day at the property.

Sam thought the location was perfect, but he needed the basement in addition to the first floor to

execute his business plan. Lauren, in a hurry to make a sale, provided a sketch of the first floor and

marked the map as "Exhibit A" and attached it to a lease document that she had made which outlined

the terms of the agreement. The agreement (prepared by Lauren who is not a lawyer, but who thinks

she is because of her one law class at SU) had the parties, the rent amount, and the term of the

agreement which was for 5 years with 5-year options. Sam insisted that he be allowed to make some

cosmetic changes and repairs to the space to accommodate the look he wanted for his very particular

and exclusive clientele. Lauren again, quickly agreed but only updated the Map on Sam's copy of the

lease agreement to include the basement. Dorothy had given Lauren her full authority to contract in

this situation as she was very busy running her real estate empire and had no time for this small space

on the first floor of the building.

There seemed to be an agreement and a signed document so Sam began construction of the remodeled

space. The noise was quite the irritant to Dorothy and her staff and she quickly became annoyed with

her new tenant. In addition, Dorothy noted that Sam was using the basement space, but she did not

recall the agreement including the basement. Her copy of the agreement only showed a sketch of the

first floor with no reference to the basement space. Again, too busy to worry about it, she let the

construction finish, which included the installation of a washer, dryer and other equipment in the

basement and attended the grand opening of the salon which was sparsely attended but tastefully done.

Once the business began operations, it was clear that the basement was being used as a breakroom for

the salon staff. They were eating their lunch in the basement, smoking cigarettes in the confined area

and generally leaving a mess. Dorothy and her staff were also using the basement for storage and they

would observe this behavior when accessing the basement. In addition, the only way for anyone to get

to the basement was via a stairwell that was in the leased space by Sam. The lease did not mention the

landlord's right to enter the leased space or under what circumstances she or her staff could enter.

As a few months went on, it was also clear that the entire building was heated and cooled from a

thermostat in Sam's portion of the building. Sam's business used various equipment in the spa process

that caused the temperature in the leased space to raise so high that Sam had to turn on the air

conditioning during the winter in Syracuse, New York. Dorothy's staff was constantly in her office

complaining that they couldn't work in these conditions. Dorothy, too was wearing three sweaters to

work to keep warm in her own office, and giving due weight to the fact that she was originally from

Rochester, NY this was too much. As such, she would regularly go down after hours into the leased

space and adjust the temperature via the thermostat in the leased space. Sam and his staff would come

to work each day in their shorts and T-shirts because the heat was too much. Sam kept yelling at his

staff to stop playing with the thermostat. Of course, the staff continue to claim they had nothing to do

with the temperature adjustment. One of his staff, a hair stylist named Allison decided to borrow her

nanny camera from home and aim it at the thermostat to see who was changing the temperature. The

camera caught Dorothy on a number of occasions adjusting the thermostat and muttering, "That'll fix

'em".

Finally, having enough of the mess, cigarettes and temperature wars, Dorothy called Lauren and yelled

"you got me into this mess with this space, you get me out"! Dorothy told Lauren that she never agreed

to rent the basement, her copy of the lease doesn't include the basement, she never agreed to lease the

space and she wanted Sam out.

Sam after 6 months in the new location was similarly disenchanted. He lost most of his downtown

business customers. He failed to take into account the convenience of his previous location to the

business people of the City of Syracuse. They were unable to drive out to the new location during their

lunch and make it back in time for their work schedule. Business was bad, he had invested $20,000 in

improvements, which was his life savings after he finished paying his student loans. He was looking for a

way out of the lease, but didn't know how to do it since he had 4 plus years remaining.

Lauren, being stuck in the middle, tried to negotiate between both sides. Pursuant to Dorothy's

instructions, Lauren (with dreams of being able to lease all of Dorothy's properties) went to Sam and

demanded that he stop using the basement. Sam refused; pulling out his copy of the agreement with a

different map than the one Lauren had provided to Dorothy. (It appears that Lauren, in her haste to

make the deal had attached different copies of the space to the two parties' agreements). Lauren

demanded that Sam stop using the thermostat, Sam continued and even left the windows open in his

space. Sam demanded the sign out front be completed to show the salon was a tenant, instead Dorothy

purposely had the landscaper not cut the bushes in front of the salon sign.

The war of the Oranges continued to rage until both sides realized that this couldn't be resolved. Lauren

sues Sam for breach of contract in small claims Court hiring another friend from her LPP days Meghan

Dorsey Esq. Sam, calls on his SU friend and attorney Charles Placek Esq., who works at the largest law

firm in Syracuse (and commands the largest fee), and also countersues for breach of contract asking to

terminate the contract and demands $30,000 in damages.

What contractual issues do you need to consider in this fact pattern? Answer using the IRAC format?

Answer rating: 100% (QA)

Issue The primary contractual issues to consider in this fact pattern involve the terms and performance of the lease agreement between Dorothy Deng and Samuel Turecamo including the use of the basemen... View the full answer