Question: Hide Assignment Information Instructions FACT PATTERN Jackson and Jennifer own JJ Deli, LLC which rents commercial space from Circle Shopping Center, Inc. The space is

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Instructions

FACT PATTERN

Jackson and Jennifer own JJ Deli, LLC which rents commercial space from Circle Shopping Center, Inc. The space is rented under a 5-year lease and JJ Deli is in complete compliance with the lease agreement. The commercial lease agreement between JJ Deli, LLC and Circle Shopping Center, Inc. contains the following renewal clause:

Tenant shall have the option to renew the lease for a term of five (5) years at a monthly rental to be arbitrated, negotiated and determined among the parties to this lease at said time. If the parties cannot reach an agreement on the monthly rental of the renewal, Tenant shall have the right of first refusal for any bona fide offer received by the Landlord.

JJ Deli gave Circle Shopping Center timely notice they would like to exercise the option to renew the lease for 5 more years. Circle Shopping Center denies their request and begins advertising the space for rent. JJ Deli, LLC immediately files a lawsuit against Circle Shopping Center, Inc. seeking to enforce the renewal clause.

1. Can a Court or Arbitrator require the parties to reach an agreement under the renewal clause? Why or why not?

2. During the case Circle Shopping Center receives an offer on the space from a potential new tenant. The terms offered by this potential new tenant are acceptable to JJ Deli but Circle Shopping Center refuses to let JJ Deli renew the lease. How should the Court or Arbitrator rule and why?

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