Saturday, May 17, 2014
Joseph Martin, Jr., Deli, Inc. v. Schumacher csae brief summary
· A realty lease holds the provision that the rent for the renewal period was “to be agreed upon.” Defendant Tenant starts action for specific performance to renew lease at given price and P starts action for eviction. Tenant’s complaint is dismissed and then reinstated.
· Reasoning: Contract was too vague; provided no guidelines or method by which rent to be agreed upon. What was promised cannot be ascertained. A contract with a “material term” of the agreement left for future negotiations is unenforceable.
· An agreement to agree is not enforceable. There is no formula for Schumacher to follow that is reasonable or knowable. There is no contract. Eviction proceeding can proceed.
· The “holdup problem” is a big part of contract law…occurs in lots of contract situation (employment, etc)
· Ex ante critique: landlords will take advantage of this non-enforceable wording
· Ex ante defense: tenants will know to shop around for a clear and precise lease agreement
· Ex post argument: Maybe the deli is not the “best user” of this space and someone else values it more highly. This is a critique of the UCC rule.
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