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NEWS Notice requirements in a commercial lease are addressed by the Court of Session

2 July 2018

Commercial parties to a contract are generally expected to be more aware of their legal rights and obligations than consumers or individuals. In cases concerning commercial leases the courts have traditionally been strict in their interpretation of clauses and the ability of parties to do things which are not exactly in line with the contract’s terms. However, the recent case of Gateway Assets Ltd v C. V. Panels Ltd[2018] CSOH 48 is the latest of a number of cases which demonstrate that the court will look at the context of the agreement rather than just the literal wording of its terms.Summary of factsThe case concerned a commercial lease with a clause allowing the tenant to terminate it early. Such clauses are generally referred to as “break options”. This option had to be exercised by the tenant serving notice on the landlord at least six months prior to the 5th anniversary of the lease. Three years into the lease the landlord sent a letter to the tenant informing them that they had appointed an agent who were authorised to deal with “all aspects of management including the collection of rent and service charges”. The tenant was asked to send “all communications and correspondence” to the agent.View the rest here.

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