That will depend on how definite and unequivocal your expression of financial difficulties was. In a recent New York case, before the term of the 15 year commercial lease was to begin, the New York tenant advised the landlordthat it was experiencing financial difficulties.
By an email message, the tenant offered the landlord certain “options” for modifying the lease terms. The landlord stopped the construction that it was performing under the lease and terminated it. The tenant sued to recover its security deposit and damages for the landlord’s breach of the lease.
The landlord counterclaimed to recover damages arising from the tenant’s alleged “anticipatory repudiation” (an act or declaration before performance is due under a contract that indicates that the party will not perform his or her obligation on the future date specified in the contract).
Under the doctrine of anticipatory repudiation, when a party repudiates contractual duties prior to the time designated for performance and before all of the consideration has been fulfilled, the repudiation entitles the other party to claim damages for total breach.
The New York Appellate Division, Second Department ruled that the email message did not constitute an anticipatory repudiation because it was not an unequivocal, definite, and final expression of the tenant’s intention not to perform its obligations under the lease. Mere expression of difficulty in tendering the required performance, is not tantamount to a renunciation of the contract.
If you are a landlord or tenant withquestions about leases and your legal rights and obligations regarding leases, or any other rental issues that may arise, call the New York Landlord & Tenant Attorneys at Friedman & Ranzenhofer, PC at 585-484-7432. Our attorneys will be happy to help you with your legal issues
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