Daily Development for
By: Patrick A.
Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu
LANDLORD/TENANT; TERMINATION; SURRENDER: Binding surrender contract is formed by oral
acceptance of a written offer.
Morton's of
The tenant sent the landlord a written offer of
termination. The landlord verbally
accepted the tenant's offer, followed by written acceptance on the same day.
The following day the tenant faxed a revocation of the offer.
It arrived at landlord's office apparently before tenant
received landlord's letter accepting the termination.
The lease provided that "any notice, demand, request or
other document or instrument which may be or is required to be given under this
lease, shall be in writing and shall be deemed delivered when received or first
refused."
Tenant took the position, apparently, that the written
acceptance of the termination was not effective until received, and that by
that time it had withdrawn the offer to terminate. It must have believed this a lot, because
the ultimate damages for tenant's holdover amounted to over $400,000.
Landlord brought action against tenant seeking declaration
that its oral acceptance of tenant's written offer to terminate the lease was
valid. The court agreed. Ordinary contract law provides that an
acceptance of offer is effective upon dispatch, and a contract springs into
existence at the time of mailing.
Although the lease required notice of termination to be in writing,
effective upon receipt, the lease language did not apply to the acceptance of
tenant's offer of termination. Because
the oral acceptance occurred prior to tenant's attempt to revoke its offer, the
court reasoned, the termination was valid.
Comment: The decision is correct, but the court may have lost sight of the fact that the landlord's written acceptance in fact was vital, because an executory contract to surrender a lease is an agreement normally within the Statute of Frauds. Nevertheless, since the lease did not apply to the acceptance, the landlord's execution of the acceptance of the surrender was effective upon mailing, thus satisfying any requirement for a writing.
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