Business Law Update: In Commercial Leases Courts Will Enforce the Plain Meaning

Happy Friday all!

 

I read an unpublished court of appeals decision from November 17, 2015 – Mandre Properties LLC v Darren R. Marsh DDS No 322633

The opinion was brief and to the point. It is an easy read

Facts (straight forward):

The parties entered into a commercial lease.

Tenant vacated the premises before the lease expired.

As a result, Tenant breached the lease.

Landlord claimed it was owed $41,661.55

The trial court ordered tenant to pay $6,768.00.

Why the trial court reduced the amount, is unclear from the opinion.

Landlord appealed.

The Court of Appeals reversed the trial court – “you got the amount owed wrong”

COURTS WILL ENFORCE A LEASE THIS IS CLEAR IN ITS MEANING

The Court of Appeals held that the language in the commercial lease was plain and unambiguous – therefore the circuit court should have enforced the lease to its terms.

As the Court of appeals held: “The circuit court was required to enforce the unambiguous contract as written.” citing In re Smith Trust, 480 Mich 18, 24 (2008).

Lesson:

In commercial leases if the language that the parties agreed to is clear the court’s job is to enforce the lease.

As a landlord or tenant to commercial leases, you have a particularly vested interest in making sure that:

1. The language in your lease is clear;
2. That you understand what it is you binding your business to.

If a Court is doing its job, it will simply enforce whatever you agreed to.