In addition to being a classic, first-year law
school exam question, the above-situation is quite common in the commercial
leasing industry. Many tenants attempt
to take advantage of landlords by hand-writing modifications into leases and
then signing. The logic from the
tenant’s perspective is that the landlord is more likely to agree to the changes
if the tenant’s signature is already affixed to the lease. In other words, the landlord may determine
that the advantages of securing a tenant outweigh the disadvantages of agreeing
to the tenant’s modifications.
In contractual terms, when a tenant returns a
signed lease with handwritten modifications, the tenant is presenting a
counteroffer to the landlord. If the
landlord reviews the modifications and signs the lease, the landlord is
accepting the tenant’s counteroffer. If
the landlord crosses out the modifications and signs the lease, there is no meeting
of the minds and thus no enforceable agreement, as the landlord has rejected
the tenant’s counteroffer. If the
landlord has executed the lease before sending it to the tenant, there is also no
meeting of the minds.
In general, a commercial landlord should not sign a lease which contains the tenant’s handwritten modifications unless the landlord agrees to the amended terms and initials the changes. Oftentimes, handwritten modifications conflict with other provisions of the lease, rendering those provisions ambiguous and unclear. In addition, the actual modifications may be vague or unclear since they are usually not written by attorneys. This is problematic for the landlord that is attempting to enforce the lease, as most judges will construe an ambiguous lease provision in favor of the tenant.
Whenever a landlord receives a lease copy signed
by a prospective tenant, it should examine each page of the lease to make sure
that the tenant has not made any handwritten modifications. If the tenant has made handwritten modifications,
the landlord should carefully read the modifications to assess the changes that
the tenant is proposing, to determine whether the proposed changes are clear as
written and to determine whether the proposed changes conflict with any other
portions of the lease. The safest thing
for the landlord to do is to incorporate the modifications to which it agrees
into the type-written lease and return it to the prospective tenant for a signature.
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