«

»

Říj
08

Hipwell vs. Szurek was about renting local cafes. The tenant encountered problems due to supposedly uncertain electrical wiring. The tenant argued that she had the right to withdraw from the lease. It argued, inter alia, that the lessor had a negative breach of an implied provision which made it liable for the maintenance and repair of the electrical installations. The lessor refused liability and relied on the entire contractual clause and the non-confidence clause in the rental agreement. These provide that the lease „represents the entire agreement and understanding of the parties with respect to the transaction contemplated by the award of this lease and replaces all previous agreements between the parties concerning the transaction“, and that the lessee „does not agree with any statement or assurance“ when entering into the lease, issued by or on behalf of the owner“. There must be some form of consideration for the concession, even if it is a „nominal payment“. In situations where the subsidiary letter is concluded at the same time as the rental agreement, the resumption of the lease itself is considered sufficient. „Can`t we just make a side letter?“ are words that a commercial real estate lawyer will undoubtedly hear countless times over the course of the year. If you are acting for either a landlord or a tenant, the care and diligence necessary to write side letters is essential. The balancing of the rental agreement must be carefully weighed. What if a tenant company was bought through a share sale? What if the tenant violates the obligations contained in the rental agreement or in the additional documents? If the lease contains a clause relating to „the whole contract“, the parties should ensure that a secondary letter agreed upon at or before the conclusion is included in the entire contract statement.

Like any contract on the merits, a subsidiary letter presupposes in particular a legitimate object and a non-fraudulent intention of the parties. Therefore, a side letter should not intend to deceive third parties or circumvent binding legal provisions.. . . .