How’s this for sneaky…

I recently advised a client looking to purchase a particular business. On reading through the Contract of Sale I perused the Lease attached to the Contract. The Lease expired in a year’s time, but it had two options to extend for two more periods of five years. Fortunately, I did not stop reading there. Buried in the fine print of the lease (and there was a lot of fine print) was this little gem:

‘No commitment has been given or intimation made by the Lessor or anyone on its behalf that the Lessor will give a further lease of the premises after the terminating date.’

Such a statement of course contradicts the options in the lease granting a further term. Thinking this may have been included by error, I asked the vendor to request from the landlord that this term be deleted. They refused! I advised my clients that the options in the lease were therefore worthless, and they should not proceed to purchase the business. Who wants to buy a business with only one year to run on the lease and no security of tenure?  In my 29 years of legal practice this is the most devious and underhanded example of legal drafting I have ever seen. I am appalled to think that a fellow legal practitioner may have intentionally drafted the lease in this way to give their client a way to dishonor the options in the lease.  I can only assume this was the reason for the current tenant’s desire to sell the business. Too bad for him.

Moral of the story: always have an experienced solicitor read and advise you on any Contract you are thinking of signing. You may be buying someone else’s problem. The pitfalls and traps are numerous and varied and often surprising. Do not fall victim to them.