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Romanettes in this lease-termination provision might have saved everyone a lot of money

May a landlord terminate a lease just because the landlord has decided to demolish the building?  That might well depend on the lease agreement.  In a Penn­syl­va­nia case, a trial court granted summary judgment in favor of the landlord, but an appellate court reversed and remanded for trial to resolve an ambiguity in the lease agreement’s termination provision. Those expensive legal proceedings might have been avoided at the contract-drafting stage by judicious use of rom­an­ettes — or better still, by breaking up the language to speed up legal review.

The agreement language

Here’s the relevant agreement language:

In the event that Lessor’s building is damaged by fire or other casualty and Lessor elects not to restore such building, or Lessor elects to demolish the building, Lessor may terminate the Lease upon not less than 60 days notice to Lessee upon paying Lessee ten (10) times the net operating income earned by Lessee from the Advertising Struct­ures or the Premises for the immediately preceding twelve (12) month period.

BL Partners Group, L.P. v. Interbroad, LLC, No. 465 EDA 2016, slip op. at 2 (Pa. App. June 15, 2017) (reversing and remanding summary judgment; non-precedential).  (Hat tip: Stacey Lantagne at ContractsProfBlog.)  Overturning the trial court’s ruling in favor of the landlord, the appeals court ruled that the bold-faced language was amb­ig­u­ous, because it could reasonably be interpreted in two different ways, and therefore a trial was necessary to resolve the ambiguity. See id., slip op. at 1.

Adding clarity with romanettes

Here’s a first possible meaning of the bold-faced language, with romanettes inserted to demark the possibilities:

In the event that (i) Lessor’s building is damaged by fire or other casualty and Lessor elects not to restore such building, or (ii) Lessor elects to demolish the building, then Lessor may terminate the Lease ….

(Adding the word “then” helps the reader to quickly locate the consequence clause, which I just discovered is called the apodosis.)

Here’s a second possible meaning, with the romanettes rearranged:

In the event that Lessor’s building is damaged by fire or other casualty and (i) Lessor elects not to restore such building, or (ii) Lessor elects to demolish the building, then Lessor may terminate the Lease ….

Just seven extra characters — or 13 extra characters if you count the “then.” They’re cheap insurance against expensive ambiguity disputes.

Even better:  Break up the sentence to ease the reviewer’s job

To make the termination provision even more readable, we could further break up the sentence, as follows (using the second meaning as an example):

(a) Lessor may terminate the Lease in accordance with subdivision (b) in either of the following cases:

(1) Lessor’s building is damaged by fire or other casualty and Lessor elects not to restore such building; or

(2) Lessor elects to demolish the building.

(b) To terminate the Lease under subdivision (a), Lessor must:

(1) give Lessee  not less than 60 days notice; and

(2) pay Lessee 10 times the net operating income earned by Lessee from the Advertising Struct­ures or the Premises for the immediately preceding 12-month period.

Sure, the broken-up sentence would take up more space on the page. But it also would likely be a bit easier and quicker to review — and because contract review is often the biggest bottleneck in getting contracts to signature, it makes sense to try to save time for the reviewer as opposed to saving paper.

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