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MCLE Article and Self-Assessment Test


A landlord has several options for fulfilling, or even avoiding altogether, the duty to mitigate damages when a tenant breaches a lease 

By G. Richard Green and Eric D. Jarvis 

G. Richard Green practices law in Beverly Hills, where he specializes in general civil law, and business and real estate litigation. Eric D. Jarvis is director of Hankey Investment Company, for which he engages in business development and consults on commercial real estate matters. 

Litigators often accept without question the existence of a lessor's duty to mitigate damages arising from the default of a lessee. Raising the mitigation issue in the answer to a complaint for unlawful detainer and damages has become virtually automatic; in fact, the failure to mitigate is often the primary defense asserted by the breaching lessee. 

The obligation of a landlord to mitigate, however, is not always clear-cut, and there are even circumstances in which a lessor may opt not to mitigate at all and simply sit back and seek rent under the original lease as it comes due. Unfortunately, there is a dearth of California law providing directions to landlords on exactly what actions must be taken even when a landlord is required to mitigate. Paradoxically, there are myriad common situations in which the landlord's failure to lease the premises may be construed as a satisfaction of the duty of mitigation. 

The means by which a landlord initially evaluates and approaches a breached lease may make all the difference between winning a sizable judgment against a party able to pay and sitting on an empty piece of property collecting nothing. Whether or not a lessor declares a forfeiture under the lease is at the heart of the landlord's decision. In turn, what the lessor does once it acts may determine the viability of claims for damages. Careful analysis and planning will enable a landlord to recover damages that might otherwise be elusive. 

More often than not, and frequently as a simple and practical reaction, a landlord will change the locks after a commercial tenant breaches its lease and vacates the premises so that the breaching tenant's keys will no longer provide entry. Usually the lessor will proceed to clean the premises in order to make the property more attractive for prospective tenants, put up a sign to attract a new tenant, and list the property to relet. The landlord then begins the fight for payment of back and future rent from the defaulting party. 

Most landlords believe that these actions will be beneficial not only in ensuring that the breaching party is kept from the premises but also in assertively seeking a replacement tenant. But this conduct actually may seriously hamper the landlord's ultimate goal of maximizing income from the property. Moreover, these actions in some circumstances may not be enough to satisfy a landlord's duty to mitigate. 

A landlord is thus faced with a number of practical questions that must be addressed at the inception of the breach. The threshold issue that must be determined in all instances is whether or not a lessor actually has the responsibility to mitigate damages at all. 

The usual and more common lessor's remedy for the breach of a lease is set forth in Civil Code Section 1951.2. However, an alternative remedy is described in Civil Code Section 1951.4. Except as otherwise provided in Section 1951.4, Section 1951.2(a) provides that a lease terminates if the lessee "breaches the lease and abandons the property before the end of the term" or if the lessee's "right to possession is terminated by the lessor because of a breach of the lease.…" The lessor, upon termination of the lease, may recover rent that remains unpaid at the time of the termination, and "the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the lessee proves could have been reasonably avoided..."1 

The lessor's responsibility to mitigate damages arises from the statutory language that refers to the rental loss that could reasonably have been avoided. The "reasonable" standard, or test, prevails throughout any discussion of the mitigation of damages, and what might be reasonable in one case may very well be unreasonable in another. For example, simply listing a multiuse storefront property in the real estate section of the newspaper may suffice to mitigate in one case, whereas doing likewise for a single-use property may be completely ineffective because the newspaper may not reach potential lessees. 

There are circumstances in which a lessor may want to continue the lease's viability and attempt to collect rent from the lessee as it becomes due, even though the lessee has breached the lease and abandoned the property-the scenario specifically anticipated by Civil Code Section 1951.4. This may occur when there is a relatively short term left on the breached lease, the nonuse of the property for the remaining term is not an issue (a factor that usually excludes retail spaces), and-for good or bad, more often than not the single deciding factor-the landlord is likely to collect from the breaching tenant. 

Section 1951.4 provides a basis for recovery for the landlord that effectively shifts the burden to mitigate onto the breaching tenant. Section 1951.4's basic requirements are that the landlord may not terminate the tenant's right of possession and must include the language of the section's appropriate provisions in the lease. A lease provision ensuring Section 1951.4 protection should include the following: 

The lessor has the remedy described in California Civil Code Section 1951.4: the lessor may continue the lease in effect after the lessee's breach and abandonment and recover rent as it becomes due, if the lessee has the right to sublet or assign, subject only to reasonable limitations. These provisions enable the tenant to find a substitute tenant and to sublet the premises. 

From the express language in the lease, the tenant is placed on notice that 1) the landlord may elect to hold the tenant to the term of the lease, and 2) the landlord does not anticipate bearing an affirmative duty to find a new tenant or subtenant. As a result of these provisions, the tenant will be aware that the landlord may not be required to mitigate and perhaps will take no actions other than simply seeking to recover full rent if the tenant does not find a subtenant. 

Real property leases are known to be quite lengthy documents: the California Association of Realtors form, for example, is usually at least 12 pages long with regular attachments, and a shopping mall store lease is rarely less than 25 pages, with many reaching four times that amount. Lessees-specifically those that are careful readers of their leases, no matter how long-should affirmatively and aggressively find a subtenant if the lease contains pertinent Section 1951.4 language. By signing a lease with Section 1951.4 provisions, the lessee places this obligation squarely on its own shoulders. 

Because the primary risk of failing to find a substitute tenant falls upon the existing tenant, the existing tenant must indeed have a nonterminated tenancy to offer. Hence Section 1951.4 remedies are available "so long as the lessor does not terminate the lessee's right to possession..." 

Most three-day notices require the lessee to quit the premises. However, under Grand Central Public Market, Inc. v. Kojima,2 a notice to pay rent or quit does not automatically terminate a lease. In fact, Grand Central notes that mere service of the three-day notice, by itself, does not restore the landlord to actual possession. Though the tenant's right of possession is terminated by the notice, possession is restored only when the notice is acted upon by one of the parties-either the tenant quitting or vacating or the landlord's prevailing in an unlawful detainer action. Grand Central has been quoted as standing for the basic proposition that if the lessee quits the premises the lease is forfeited by agreement of the parties.3 Though Grand Central was decided before the enactment of Civil Code Sections 1951.2 and 1951.4, the decision remains good law and and is consistent with the newer statutory provisions of Section 1951.2,4 which now defines lease termination as occurring when "right to possession is terminated by the lessor because of a breach of the lease..."5 Hence, pursuing an unlawful detainer action to judgment may preclude recovery under Section 1951.4. 

Lessors and their counsel must also pay attention to the precise language used in a three-day notice and not simply follow a form as a matter of course.6 Many form leases will effectively eliminate the lessor's ability to rely on Section 1951.4. Language in the three-day notice may lead to the termination of possession when the lessor actually has no such intent. There are circumstances in which the usual language in the three-day notice directed to "all others in possession" should be omitted, since the landlord may seek to hold an assignee or sublessee to the lease terms. Additionally, boilerplate language in which the landlord elects to terminate the lease should be eliminated from those notices for which Section 1951.4 is the statute of choice and the lessor specifically does not want to terminate the lease. 

A landlord's actions such as changing locks (without giving the breaching lessee new keys) or taking affirmative conduct to relet the premises without plainly notifying the breaching lessee that such efforts are being made on the lessee's behalf may be interpreted as terminating possession and effectively precluding the lessor's ability to rely on Section 1951.4.7 Landlords and their counsel must take care at the inception of a breach or anticipatory repudiation by a tenant that the landlord does not hastily engage in conduct that may seem initially desirable economically but may not be consistent with maintaining a position for greater damages and achieving the best results in litigation. In Willis v. Soda Shoppes of California, Inc.,8 even though the lessor had stated in writing an intent to hold the lessee to the terms of the lease, the trial court found that the lessee had been deprived of possession because 1) the lessor had picked up the keys, 2) he had not stated that his attempts to relet the premises would be on behalf of the lessee, and 3) he had sought a remedy inconsistent with the theory that the lease was not terminated.9 The court of appeal upheld the trial court's finding that the lessor was not entitled to proceed under Section 1951.4. 

However, Civil Code Section 1951.4 provides that the lessee's right to possession is not terminated when the lessor acts to maintain or preserve the property or makes efforts to relet.10 The lessor also does not terminate the lessee's right to possession if the lessor terminates a sublet or an assignment so long as the lessor does not violate the lessee's reasonable right to resublease or reassign.11 While the lessor is thus privileged under Section 1951.4(c) to perform acts of maintenance or preservation, and to make efforts to relet and terminate a sublease, the lessor may not do so in a manner that deprives the lessee of possession, such as not allowing the lessee access to the premises. Lessors must ensure that their conduct from the outset does not exceed the options allowed under the statute if they choose to pursue this remedy. 

The second requirement under Civil Code Section 1951.4-that the lease itself must provide for the remedy and must permit the lessee to sublet or assign the lease-is reflected in most current commercial leases. Under the inclusive language of Section 1951.4, lessees may sublet or assign the lease subject to reasonable conditions on the subtenant or assignee, such as no significant physical or structural changes to the property, not causing detriment to the property, and-as usual, the most important of all-being solvent and financially responsible. Some landlords, however, may simply decide that they will not allow assignments and subleases because they are more trouble than they are worth, and they do not make sense as an acceptable economic proposition. Other landlords choosing the Section 1951.4 remedy have concluded that excluding the language may allow a tenant to be unduly cavalier in its approach to a breached lease. 

Even if the tenant mitigates, more often than not the landlord will seek to keep the original tenant on the hook in addition to the new sublessee. As a practical matter, it is only when a sublessee of greater financial strength can be acquired that a landlord may be enticed to accept a complete assignment of the lease and allow the original tenant to escape from future liability. Moreover, it is precisely because the original tenant remains liable that the lessor may reasonably reject prospective sublessees. Obviously, no landlord will allow a tenant to escape liability on a lease in favor of a financially weaker subtenant. 

Section 1951.4 effectively places the burden of reletting the premises upon the tenant and consequently allows the landlord to avoid the problems of mitigation altogether. With no obligation to mitigate under the statute, the landlord can simply hold the tenant to the entire term of the original lease if the tenant does not affirmatively mitigate its own damages. Frustrated tenants frequently appear in court claiming a landlord's failure to mitigate under such circumstances, but the pleas should fall on deaf ears. In fact, it is the lessor that can point the finger directly at the lessee and argue successfully that if the tenant wanted to lessen the damages it could have done so itself by affirmatively acting to sublease or assign. Under the Section 1951.4 scenario, it is the lessee that should post signs, advertise the property, and contact real estate brokers, among other actions, to find a subtenant and at least attempt to avoid full liability for the term of the lease. 

But if the right to possession is terminated, then Civil Code Section 1951.2 applies, and the obligation to mitigate must be borne by the lessor. While it is the lessor that must make reasonable good faith efforts to relet the premises for the balance of the unexpired term,12 the burden of proving a failure to mitigate is placed upon the breaching tenant. The lessee must prove that some of the rent the landlord seeks to collect could have been recovered had the landlord acted in a reasonable manner, and that the landlord did not in fact act reasonably in avoiding damages.13 

In light of the burden of proof shifting to the lessee, it is not entirely correct to say that a landlord-the injured party-has a duty to mitigate damages since "breach of the 'duty' does not give rise to a correlative right of action."14 As the court states in Green v. Smith,15 a preferable formulation is that "the wrongdoer is not required to compensate the injured party for damages which are avoidable by reasonable effort on the latter's part."16 So it would be the foolish landlord indeed that would not take even reasonable steps to mitigate, such as the simple tasks of listing the property with a broker, putting up signage, and advertising the property, even if the landlord had no such duty. Most certainly the "wrongdoer" lessee will immediately investigate the activities of the landlord upon receipt of a complaint for damages, and if the landlord in a Section 1951.2 scenario has taken no action to mitigate, the tenant may mount a successful defense against a claim for damages. 

Mitigation considerations can prove unusually perplexing in connection with commercial leases. For example, the question of whether or not a landlord under a duty to mitigate may be required to entertain substitute leases that propose a term extending beyond the original lease term is a common one, even though California courts have not yet provided an answer. Another difficult issue is whether a landlord under a duty to mitigate may be required to accept substitute leases that offer a less than ideal tenant.17 What about the crafty, wrongdoing tenant that offers the lessor the opportunity to enter into a new lease for the property with the tenant at different terms-usually including reduced rent? This tenant could try to argue that the landlord could have mitigated damages by entering into a new lease with the original breaching party-a creative argument, to be sure, but one that does not work. A reasonable effort to relet the property under Section 1951.2 does not require a landlord to consider a breaching tenant's offer to relet the property.18 In fact, should the breaching tenant make such an offer and take the position that the landlord failed to mitigate by refusing to consider it, the offer may not even be received as admissible evidence.19 

Underlying questions about what constitutes the failure to mitigate is the meaning of "reasonableness." Must a landlord accept a substitute lease or tenant with terms that go beyond the breached lease in order to be reasonable? The answer depends on the circumstances present at the time the landlord is facing the loss. According to Green, whether the conduct of the landlord is reasonable is judged in light of those circumstances and with a consideration of the lessor's individual means and capabilities. 

Commercial leases often terminate with just one year or less left on the term. While it is commercially unreasonable to expect to find a substitute commercial tenant willing to accept a commitment for a short term left on an existing lease, must a landlord accept a lease for a longer term?20 Can the landlord refuse to accept the substitute lease, leave the property vacant for the remainder of the existing lease, and collect the entire amount of rent due under the lease from the breaching tenant? In searching for guidance when no precedent on replacement leases exists, courts will look to general principles of damage mitigation.21 The Law Revision Commission report on Civil Code Section 1951.2 quotes Green with approval to establish the definition of "reasonableness": "[t]he reasonableness of the efforts of the injured party must be judged in the light of the situation confronting [the party] at the time the loss was threatened and not by the judgment of hindsight."22 

In Green, the lessor, a grower of ornamental nursery trees, sought damages for crop loss sustained as a result of the tenant's destruction of a concrete irrigation ditch. The trial court found that the lessor suffered damages in excess of $17,000. Although the lessor had taken steps to mitigate its damages, the trial court found that the lessor could have avoided all crop loss, at a cost of not more than $600, by pursuing one of five alternatives proposed by the defendant at trial. The trial court therefore limited the plaintiff's recovery to that amount. The appellate court reversed on the ground that the plaintiff, even in pursuing ultimately unsuccessful measures, had fulfilled the lessor's duty of mitigating damages, and the alternative measures proposed in hindsight were deemed to be irrelevant.23 

According to Green, "[t]he standard by which the reasonableness of the injured party's efforts is to be measured is not as high as the standard required in other areas of law."24 The Green court notes further that "[w]here two reasonable options for attempting to avoid damages present themselves, the injured party will be held to have properly mitigated damages by choosing either option."25 Additionally, the injured party need not make large expenditures that are beyond the party's means in an attempt to mitigate.26 

Under general principles of mitigation, the injured party's efforts to mitigate damages are evaluated in the commercial setting surrounding the transaction. For example, in Henrici v. South Feather Land & Water Co.,27 which was based on a utility customer's claim that a water company had raised its rates in an unlawful manner, the customer could not refuse to pay the higher rate and recover damages for crops lost after water service was cut off. The commercially reasonable course was for the customer to pay the relatively small increase, then sue to recover the overpayment. Zanker Development Co. v. Cogito Systems, Inc.28 held that a lessor need not re-lease property to a breaching lessee at a lower rent in order to mitigate damages.29 The court recognized the commercial reality that a lessee could potentially take advantage of a lessor by breaching the lease but offering to stay on the premises at a lower rent. 

Whether or not a mitigating lessor has an obligation to accept a sublessee for longer than the original lessee's lease term can be examined in terms of the principle of mitigation embodied in Civil Code Section 1951.2. The section holds the lessor to its commitment to make the property available for use by another during the period of the lease, so long as the lessor seeks to hold the lessee to its responsibilities under the lease. Once the term of the lease ends, the parties have no further obligation to each other, and the property returns to the sole control of the landowner.30 Put another way, at the end of the agreed lease term, the lessor reacquires the right to act in a commercially unreasonable fashion with respect to the property. Owners of real property have absolute dominion over it,31 including the right to possess, transfer, or dispose of the property in any manner that does not contravene the general policy of the law.32 Even a lowered standard of commercial reasonableness cannot be applied to a lessor's use of its property after the original lease term without interfering with the lessor's property rights. 

To hold an owner of real property to a standard of commercial reasonableness in the use of that property during a period in which the owner has not agreed to lease the property would be to diminish the bundle of rights that defines ownership of real property.33 Therefore, a property owner that wants to lease its property again after the term of a breached lease expires is privileged to hold out for a rent that all would agree is above market. After the original lease expires, the lessor may hold the property off the market in the hope that rents will rise in the future. No yardstick of commercial reasonableness may be imposed to judge a lessor's decisions with respect to any period that extends the original lease term. 

No California cases have addressed whether or not mitigation requires a lessor to accept a new lease that would increase the lessor's obligations. Other jurisdictions have considered the question, including an Indiana appellate court in Carpenter v. Wisneiwski.34 The court ruled that "the landlord is not required to alter or increase his obligations, as by extending the length of the lease term to the new tenant or by renting for a different use than provided in the original lease where such lease is specific as to use."35 The primary issue before the Carpenter court, however, was whether a lessor of premises used as a drugstore need only consider lease proposals for that same use of the property in the context of mitigating damages. The court's language about extending the length of the lease term is arguably dictum and, in any event, is not supported by citation of authority or further analysis. 

Courts have held that a breaching lessee cannot meet its burden of proof (that the rental loss could have been "reasonably avoided") by arguing that the property could have been re-leased if the lessor had extended the term of the original lease. Such an argument would make the reasonableness of the lessor's mitigation under Section 1951.2 congruent with the ability of a breaching lessee to mitigate its own damages when required to do so under Section 1951.4.36 

In a frequently cited case involving a lessor's responsibility to mitigate, the Supreme Judicial Court of Massachusetts in Woodbury v. Sparrell Print stated that "a reasonable diligence to relet the premises for the unexpired term named in the lease was all the duty the [p]laintiff owed to the [d]efendants."37 The court held that the trial judge erred in failing to instruct the jury that the lessor was under no obligation to let the premises for a longer term than that remaining on the original lease.38 

The resolution of Section 1951.2 and 1951.4 mitigation arguments is a daily occurrence in the trial courts. In a recent unreported local matter that involved a single-use commercial property, the trial court first concluded that the lessor's conduct had terminated the lessee's right to possession, and thus Section 1951.2 applied despite the presence of the appropriate Section 1951.4 language in the lease. Turning to the mitigation requirements under Section 1951.2, the tenant attempted to meet its burden by showing that a number of leases were available to the landlord, but all of these leases were for terms that exceeded the original. The court ruled in favor of the landlord because the tenant did not prove by a preponderance of the evidence that there were potential lessees who would have been willing to lease all or part of the premises for the remaining term of the original lease. The tenant thus was not entitled to a deduction for rental losses that could have been reasonably avoided. The outcome of this case, and many others, demonstrates that the failure to mitigate may be a common defense, but its success is by no means certain. For lessors and lessees, mitigation issues should be fully considered and analyzed prior to any material conduct by either party to a dispute. 

1 Civ. Code §1951.2(a)(2) (emphasis added).

2 Grand Central Public Market, Inc. v. Kojima, 11 Cal. App. 2d 712, 717 (1936). 

3 Id. 

4 Id. 

5 Civ. Code §1951.2(a) 

6 Code Civil Proc. §1161 provides the extensive statutory scheme for three-day notices, which must be precise in most respects, although there are some "precision exceptions" for commercial property. A commercial lease may validly waive or modify a lessee/tenant's rights to statutory notice. See Folberg v. Clara G. R. Kinney Co., Inc., 104 Cal. App. 3d 136, 140, 163 Cal. Rptr. 426, 429 (1980). 

7 See In re Lomax, 194 B.R. 862 (Bankr. 9th Cir. 1996) (lessor's acceptance of abandoned lease operates as a surrender as a matter of law). Each case must be evaluated based on the individual conduct of the parties in order to determine if a lessee has abandoned or breached the lease and if the lessor has accepted or "taken back" the property. 

8 Willis v. Soda Shoppes of California, Inc., 134 Cal. App. 3d 899, 901-03 (1982). 

9 Id. at 903. 

10 Civ. Code §1951.4(c)(1). 

11 Civ. Code §1951.4(c)(3). 

12 Civ. Code §1951.2(a)(2),(3) & (c). A landlord seeking to recover more than simply the rent accrued and unpaid at the time of termination must make reasonable, good-faith efforts to rerent the premises for the balance of the former tenant's unexpired term. Interestingly, damages are not recoverable to the extent the landlord failed to take any reasonable steps to avoid the landlord's consequential damages. See, e.g., Henrici v. South Feather Land & Water Co., 177 Cal. 442, 170 P. 1135 (1918); Severini v. Sutter-Butte Canal Co., 59 Cal. App. 154, 210 P. 49 (1922). 

13 Id. 

14 Green v. Smith, 261 Cal. App. 2d 392, 396 (1968) (citing Ellerman Lines, Ltd. v. The President Harding, 288 F. 2d 288, 289-90 (2d Cir. 1961)). 

15 Green, 261 Cal. App. 2d 392. 

16 Id. at 396. 

17 A less than ideal tenant may be one that will not use the property for its highest and best use. Presumably, a less than ideal tenant could also be one whose credit is questionable. The similarity of the proposed use to the previous use is certainly a factor a landlord may consider in connection with reletting the property. See Code Civ. Proc. §1951.4 (Law Revision Commission cmt. on the reasonableness of landlord consent to assignments). 

18 Zanker Development Co. v. Cogito Systems, Inc., 215 Cal. App. 3d 1377, 1382, 264 Cal. Rptr. 76, 80 (1989) ("We doubt if [anyone]…should be required to contract a second time with one who has without cause breached a prior contract with him."). 

19 Id. Since the landlord has no obligation to renegotiate a lease with a tenant who has breached its lease, evidence of the tenant's offer to relet under new terms is not admissible on the issue of whether the landlord made reasonable efforts to mitigate damages. 

20 It is difficult, at best, to relet real estate for the remaining term of a breached lease. More often than not a prospective tenant wishes to take the property in question for longer-sometimes far longer-than the term remaining on the original lease. This usually presents no problem for the landlord in a rising real estate market, but in a declining real estate market the lessor must choose whether or not to sit back and try to collect from the original tenant under more favorable terms for the remaining term of the lease, or accept a lower rental rate for the remaining term and then be left with a lease on less favorable terms than anticipated for the remaining life of the new lease. 

21 See Civ. Code §1951.2, Law Revision Commission report ("The general principles that govern mitigation of damages apply in determining what constitutes a 'rental loss that the lessee proves' could be 'reasonably avoided.'…The test in each case is whether the lessor acted reasonably and in good faith in reletting the property."). 

22 Green, 261 Cal. App. 2d at 396. 

23 Id. at 398. 

24 Id. at 397, quoted in the Legislative Committee cmt. to Civ. Code §1951.2. 

25 Green, 261 Cal. App. 2d at 398. 

26 Joerger v. Pacific Gas & Electric Co., 207 Cal. 8, 28 (1929). 

27 Henrici, 177 Cal. 442. 

28 Zanker Development Co., 215 Cal. App. 3d 1377. 

29 Id. at 1382. 

30 See Civ. Code §1951.2, Legislative Committee cmt. (lessor is not accountable for any excess rents obtained through reletting, over and above damages, because "the lease having been terminated, the lessee no longer has an interest in the property"). 

31 See Kelly v. McCarthy, 6 Cal. 2d 347, 352 (1936) (right of absolute dominion over property is "sacred and inviolable," citing In re Kaufman's Estate, 117 Cal. 288 (1897)); Goldman v. Goldman, 116 Cal. App. 2d 227, 234 (1953) (citizen has absolute dominion over his or her property subject to the principles of sovereignty). 

32 Dana v. Stanford, 10 Cal. 269, 277 (1858). See also Goldman, 116 Cal. App. 2d at 234 (quoting In re Kaufman's Estate, 117 Cal. at 295). 

33 Ehrlich v. City of Culver City, 12 Cal. 4th 854, 888 (1996); Union Oil Co. v. State Board of Equalization, 60 Cal. 2d 441, 442 (1963). 

34 Carpenter v. Wisneiwski, 215 N.E. 2d 882 (Ind. Ct. App. 1966). 

35 Id. at 884. 

36 See Zanker Development Co., 215 Cal. App. 3d 1377; Sebastian v. Peck, 195 Cal. App. 3d 803, 810, 240 Cal. Rptr. 911 (1987). 

37 Woodbury v. Sparrell Print, 84 N.E. 441, 442 (Supp. Jud. Ct. Mass 1908) (emphasis added). 

38 Id. at 443. See also Robinson Seed & Plant Co. v. Hexter & Kramer, 167 S.W. 749 (Tex. Civ. App. 1914) (holding that a lessor acted reasonably in demanding an increased rent for the period after expiration of the original lease). 

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