If a term of a written agreement you are negotiating is not exactly as agreed, do not let it go. In Coyote Aviation Corp. v. City of Redlands, Coyote negotiated a twenty-year lease with two fifteen-year options to extend, to build a hangar at the Redlands airport, was to start April 4, 2000, and terminate April 4, 2020, unless extended. Coyote was unable to take possession unit September 5, 2000. An Amended Lease was signed showing the new September 5, 2000, move-in date. The termination date of April 4, 2020, was not changed. Several months later, Coyote complained, but nothing was done about it.
Twenty years later, in June 2020, Coyote attempted to exercise the option to extend the lease term. The city refused to extend, on the ground that the lease had terminated in April which time the options terminate, too.
Coyote sued for:
- Breach of contract for denying the extension,
- Specific performance to enforce the extension option,
- Breach of the implied covenant of good faith and fair dealing, that Coyote had bargained for the extension options, and
- Promissory estoppel and detrimental reliance, that the deal had been to the two extension options,.
The first court granted a motion to dismiss (demurrer) at the very start of the case. It found none of those arguments to be persuasive When the city sued to evict Coyote, the court granted the city summary judgment without a trial for the same reason. The arguments were not persuasive. Finally, on appeal, three appellate justices affirmed both judgments.
The Amended Lease said, clearly and unambiguously, that it expired in April, not September.
Read the lease. Pay the rent when it says. Provide proof of insurance when it says. Exercise options when the lease says.
Same with a three-day-notice-to-pay-rent-or-quit. If you get an eviction notice and do not pay the rent before the three days expire, the landlord can terminate the lease. The three days mean what they say.
If you have any question about when to perform, for instance, if the other side has said, but not written, that you can perform later, either perform when the lease says or call your lawyer. If you have any doubt or question, call your lawyer.
