§ 18.01 Practices of the Parties

• Jurisdiction: United States
• Publication year: 2022

§ 18.01 Practices of the Parties

Commercial leases generally are long-lived, overseeing a wide variety of dealings among the parties over a lengthy period of time. Therefore, they are especially prone to allegations that they have been modified by dealings, accommodations, operations outside the stated requirements of the lease, latches, waivers or customs and practices of the parties.

[1]—Requirement of a Writing to Amend Lease

Common law in many jurisdictions has acknowledged the amendment of leases by actions of the parties or waivers of obligations. This is the common rule, absent a provision to the contrary in the lease document. There are two standard clauses for dealing with this phenomenon. The first example, typical of that found in most standard leases, provides that there will be no amendments or changes to the lease agreement unless the same are in writing and signed by the party to be bound thereby.

Example 1:

The parties recognize that this is the full and final agreement of the parties with respect to the subject of this lease and all prior dealings, contemporaneous understandings and warranties, representations and covenants between the parties with respect to the subject matter of the Lease will be deemed merged and no other understandings, warranties or representations shall survive unless expressly contained herein and shall not be amended, changed, altered or waived except by an express writing executed by the party to be bound thereby.

[2]—Nonwaiver Provisions

Amendments to leases do not necessarily take into account agreements of operation outside of the terms of the lease. These agreements typically happen in accordance with the customs of dealing among the parties or by apparent subsequent waivers without a writing. Although the requirement of a writing and execution by the party to be bound may be contractually valid and contained in the lease, if the subsequent dealings among the parties are deemed to constitute part performance that is sufficient to go outside of the requirement of a writing it may be deemed a waiver or an amendment of the lease through operations or customs of dealing.

Lease practitioners have concluded that from time to time customs and dealings or specific waivers might occur. To accommodate these situations, language has been drafted to cause those waivers not to be deemed an amendment to the lease itself, but merely a specific isolated instance of dealings of the parties that will not ripen into a permanent alteration of their positions in the document. The following is an example of a nonwaiver clause:

Example 2:

The failure of landlord to seek redress for violation of, or insist upon the straight performance of any covenant or condition of this lease or of any of the rules and regulations set forth or hereinafter adopted by landlord, shall not prevent a subsequent act which would have originally constituted a violation from having all the force and effect of an original violation. The receipt by landlord of rent with knowledge of the breach of any of the covenants of this lease shall not be deemed a waiver of such a breach and no provision of this lease shall be deemed to have been waived by landlord unless such waiver be in writing signed by the landlord. No payment by tenant or receipt by landlord of a lessor amount than the monthly rent herein stipulated shall be deemed to be other than on account of earlier stipulated rent, nor shall any

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