Daily Development for
Thurday, January 14, 1998

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

LANDLORD/TENANT; STATUTE OF FRAUDS: Early vacation of premises in reliance on alleged oral modification of written lease does not qualify under the partial performance exception to the Statute of Frauds.

Digby's, Inc. vs. Emory University, 489 SE2d 81 (Ga. App. 1997).

Tenant leased space for an optical store for a two year term. In the wake of disappointing business results during the first lease year, the tenant and the landlord discussed an early termination of the lease. Landlord admitted that it agreed to allow tenant to vacate and avoid liability for the balance of the lease term, provided that the tenant paid the outstanding balance due through the date of termination. Tenant asserted that the agreement was such that payment of past due rent was not a condition. Tenant vacated without paying the back rent and other sums due through the date of termination. Landlord sued for these amounts, and the trial court granted landlord summary judgment. Tenant appealed, arguing that summary judgment was inappropriate since issues of fact remained concerning the defense of accord and satisfaction.

The Court of Appeal affirmed noting that an alleged oral modification of a written lease, to be effective, must fall within an exception to the Statute of Frauds. Tenant alleged that its vacation of the premises and reliance on the oral modification constituted partial performance. The court disagreed, stating that a unilateral surrender of possession, as it confers no benefit upon the landlord and causes no loss to the tenant, does not qualify under the partial performance exception to the statute of frauds.

Comment: The court is correct. If anything, the tenant might have had an estoppel argument, but certainly nothing close to part performance. The "part performance" doctrine entails a party undertaking some performance of a contract that is uniquely attributable to that particular contract - something that the party wouldn't have done unless there was a contract. If it is expected performance under the contract, then one assumes that it is of some benefit to the other side, but the test really is whether it is performance, not whether it is beneficial. In this case, vacating the premises was part of the alleged agreement, but was not uniquely attributable to that agreement. The tenant wasn't paying the rent, and the landlord would have "vacated" the tenant if the tenant hadn't done so itself.

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