The Rent Review Specialist
Case Law
Business Tenancy Law
A business tenancy is a commercial contract, which means the parties are deemed to know what they are doing. The terms and conditions that the parties agree before the lease is signed and completed are subject to a combination of legislation which may or may not be overriding, and the body of case law for the interpretation of actual wording and phrasing.
Business tenancy law comprises legislation (Acts of Parliament, including Orders and Regulations) and case law derived from court rulings on particular issues which in many instances set a precedent and constitute evidence in support of an opinion.
Case law is the set of existing rulings that have made new interpretations of law and can be cited as precedent. Legal principles are often enunciated and embodied in judicial decisions.
For the most part, the interpretation of the construction of the wording and phrasing in leases, including lease analysis, is based upon an understanding and appreciation of case law. In my computerised law library, I have details of thousands of cases, with information and articles from reputable sources. I also subscribe to leading on-line law resources.
Whether case-law is reported or unreported, it could be binding.
To quote Lord Denning, writing in the foreword to the microfiche edition of The Court of Appeal Transcripts 1951-1980:
… every decision of the Court of Appeal on a point of law is binding on all courts of first instance and on the Court of Appeal itself. No matter whether the decision is reported in the regular series of Law Reports, or is unreported, it is binding. Once you have the transcript of an unreported decision, you can cite it as of equal authority to a reported decision, so it behoves every counsel or solicitor to find, if he can, a case – reported or unreported – which will help him advise or win his case.
Generally, I find Clients are not that interested in the details of a particular case (unless, of course, it's a matter they themselves took to court). Of greater interest and much more importance is how a particular case could and might affect their own situation. With business tenancies, use of and reliable on precedent is not necessarily sacrosanct, because much may depend upon the particular circumstances or facts surrounding the case, and often each new situation has to be assessed on its merits. The interpretation of the construction of leases is fashionable. Literal interpretation may have given way to a presumption in favour of reality, but not necessarily in all instances.
Typical matters where I am consulted on the legal aspects include whether time is of the essence for a rent review, the validity of notices, the wording of Calderbank offers, how best to defeat landlord opposition to renewal of a tenancy, whether better to take a long term lease with a break clause or a short lease with an option to renew, how to obtain more than the statutory compensation on non-renewal, reducing service charges, the effect of the Competition Act on the permitted user clause. Negotiation for rent review, include dispute resolution procedure and lease renewal including expert witness reports is also heavily dependent upon case law.
Business tenancy law comprises legislation (Acts of Parliament, including Orders and Regulations) and case law derived from court rulings on particular issues which in many instances set a precedent and constitute evidence in support of an opinion.
Case law is the set of existing rulings that have made new interpretations of law and can be cited as precedent. Legal principles are often enunciated and embodied in judicial decisions.
For the most part, the interpretation of the construction of the wording and phrasing in leases, including lease analysis, is based upon an understanding and appreciation of case law. In my computerised law library, I have details of thousands of cases, with information and articles from reputable sources. I also subscribe to leading on-line law resources.
Whether case-law is reported or unreported, it could be binding.
To quote Lord Denning, writing in the foreword to the microfiche edition of The Court of Appeal Transcripts 1951-1980:
… every decision of the Court of Appeal on a point of law is binding on all courts of first instance and on the Court of Appeal itself. No matter whether the decision is reported in the regular series of Law Reports, or is unreported, it is binding. Once you have the transcript of an unreported decision, you can cite it as of equal authority to a reported decision, so it behoves every counsel or solicitor to find, if he can, a case – reported or unreported – which will help him advise or win his case.
Generally, I find Clients are not that interested in the details of a particular case (unless, of course, it's a matter they themselves took to court). Of greater interest and much more importance is how a particular case could and might affect their own situation. With business tenancies, use of and reliable on precedent is not necessarily sacrosanct, because much may depend upon the particular circumstances or facts surrounding the case, and often each new situation has to be assessed on its merits. The interpretation of the construction of leases is fashionable. Literal interpretation may have given way to a presumption in favour of reality, but not necessarily in all instances.
Typical matters where I am consulted on the legal aspects include whether time is of the essence for a rent review, the validity of notices, the wording of Calderbank offers, how best to defeat landlord opposition to renewal of a tenancy, whether better to take a long term lease with a break clause or a short lease with an option to renew, how to obtain more than the statutory compensation on non-renewal, reducing service charges, the effect of the Competition Act on the permitted user clause. Negotiation for rent review, include dispute resolution procedure and lease renewal including expert witness reports is also heavily dependent upon case law.
Point of Law
In Shirlcar Properties Ltd v Heinitz & Another [1982], the Court stated stated that use of the expression ' subject to contract' did not constitute effective notice to set a rent review procedure in motion when formal notice had to be given. Use of the expression 'without prejudice' is widely misunderstood and so it comes as no real surprise to find that many surveyors are unable to grasp the effect of such wording when concluding rent review negotiations.
An offer made 'without prejudice' is binding if acceptance of the offer is made. By adding the words ' subject to contract,' however, the presumption that the parties intend to create legal relations may be expressly negatived. From Rose & Frank v ] R Crompton Ltd [1923], "the words of the preliminary agreement in other respects may be apt and sufficient to constitute an open contract, but if the parties in so agreeing make it plain that they do not intend to be bound except by some subsequent document, they remain unbound though no further negotiation be contemplated. Either side is free to abandon the agreement and to refuse to assent to any legal obligation .... "
When concluding negotiations, it is common for valuers to head the correspondence 'without prejudice' (and/or) 'subject to contract.' In such cases, the concluded rental will be subject to the valuer's recommendation of acceptance. This reservation in itself is sufficient evidence that no formal agreement has been reached, even if the recommendation refers to the need for 'Board approval' reckoned to be a formality. Until an offer is made without reservation, it is not agreed and some valuers and parties feel that withdrawal from the 'conclusion' is tantamount to unethical or unprofessional behaviour against the spirit of negotiation. Such opinion is, of course, the prerogative of the aggrieved party but it does not affect the legal position and, whereas such practice may conflict with expectations, valuers must recognise that the law applies as much to the interpretation of rent review covenants as it does to negotiations.
An offer made 'without prejudice' is binding if acceptance of the offer is made. By adding the words ' subject to contract,' however, the presumption that the parties intend to create legal relations may be expressly negatived. From Rose & Frank v ] R Crompton Ltd [1923], "the words of the preliminary agreement in other respects may be apt and sufficient to constitute an open contract, but if the parties in so agreeing make it plain that they do not intend to be bound except by some subsequent document, they remain unbound though no further negotiation be contemplated. Either side is free to abandon the agreement and to refuse to assent to any legal obligation .... "
When concluding negotiations, it is common for valuers to head the correspondence 'without prejudice' (and/or) 'subject to contract.' In such cases, the concluded rental will be subject to the valuer's recommendation of acceptance. This reservation in itself is sufficient evidence that no formal agreement has been reached, even if the recommendation refers to the need for 'Board approval' reckoned to be a formality. Until an offer is made without reservation, it is not agreed and some valuers and parties feel that withdrawal from the 'conclusion' is tantamount to unethical or unprofessional behaviour against the spirit of negotiation. Such opinion is, of course, the prerogative of the aggrieved party but it does not affect the legal position and, whereas such practice may conflict with expectations, valuers must recognise that the law applies as much to the interpretation of rent review covenants as it does to negotiations.