Peterson signed a preprinted commercial lease agreement with Nielsen to lease the premises in a strip mall

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Peterson signed a preprinted commercial lease agreement with Nielsen to lease the "premises" in a "strip mall at 1341 E. Center, Spanish Fork, UT," to be used as a "health club and gym" for three years at $0.85 annually per square foot. Nielsen was still constructing the building at the time the lease was signed. A contractor then told Peterson it would cost $168,000 to improve the building shell to be ready for the gym. Peterson went back to Nielsen to discuss who would pay for the interior improvements. When an agreement could not be reached, Peterson walked away and Nielsen leased to another party.

1. The Utah high court held that no commercial lease was ever formed because key terms to the lease were never set. Given that the building was still under construction, how could they have set all these details?
2. Why did the court not make the lease work or assign the appropriate costs of the construction to the parties?

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The Legal Environment of Business

ISBN: 978-0538473996

11th Edition

Authors: Roger E Meiners, Al H. Ringleb, Frances L. Edwards

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