early contract termination
September 29, 2011 | 30,00 EUR | answered by Jan Wilking
With my tenant, I agreed years ago, through an addendum signed by both parties to the lease agreement, that the commercial lease property would be expanded at my expense, on the condition of extending the lease agreement by 15 years. A few weeks ago, my tenant terminated the contract, considering the statutory notice period, 18 months before the end of the 15-year period. As far as I know, I cannot object to the early termination of the lease agreement, as unfortunately not all parts of the lease agreement were in written form.
Question: Is there a possibility to claim the damages resulting from the early termination of the contract (the new rent price for the 15-year extension of the lease agreement was calculated based on a 15-year contract duration) from the tenant in any way, and if so, on what legal basis?
Dear inquirer,
I am happy to answer your inquiry taking into account the facts you have provided and your effort as follows:
Firstly, it would need to be checked whether the written form (which should result from § 550 of the German Civil Code n.F. or § 566 of the German Civil Code a.F.) was indeed not complied with here, and therefore the lease agreement was not limited in time, but was concluded for an indefinite period and could therefore be terminated with a statutory notice period. The amendment itself seems to have been made in writing according to your description. With regard to the original contract, it would be important to determine whether the essential contract components were agreed upon in writing, especially the contracting parties, the leased object, the rent, and the duration, with the last two points being newly regulated by the amendment. It should also be noted that the written form required by § 550 of the German Civil Code primarily serves to enable a subsequent purchaser to fully inform themselves about the rights and obligations transferring to them from the lease agreement.
However, even if there is a deficiency in the written form, it would need to be examined whether the contract contains a clause stating that the written form must be completed or whether the (complete) written form was waived in the contract itself.
If this is also not the case, the lessee may still be prevented from relying on the form defect. Because it may constitute an improper exercise of rights if a contracting party relies on the form defect after having derived special benefits from the contract for a longer period of time (Federal Court of Justice, NJW 2004, 1103) or is benefited by a non-formal contract amendment (BGH NJW 2008, 365). This could be affirmed in your case due to the lower lease rent in connection with the long lease duration.
I therefore recommend having the validity of the early termination examined legally considering all documents, as there is a possibility that it may not be valid. However, if the aforementioned arguments do not apply and the early termination is actually valid due to the lack of written form of the contract and the lessee can validly rely on this, then unfortunately there may be limited options to claim damages, especially since courts assume that it is reasonable for a commercial lessor to inform themselves about the formal requirements beforehand (cf. Higher Regional Court of Brandenburg, 02.04.2008 - 3 U 80/07).
I hope this has provided you with a helpful initial orientation. If there are any uncertainties, please use the free follow-up function.
Please note that within the scope of an initial consultation without knowledge of all circumstances, I cannot provide a final recommendation. If you wish for a final assessment of the situation, I recommend contacting a lawyer and discussing the situation with them after reviewing all documents.
Sincerely,
