Many companies lease the property in which they do business. This could be manufacturing space, offices, warehouses, and storage. When a landlord and a lessee come together, they typically sign a lease. However, lessees might be wondering if they just signed a contract. Yes, a commercial lease is a type of contract. Here’s why.
Elements of a Contract
In most cases, the basic parts of a contract are:
- An Offer. Contracts should contain a clearly-stated reason for the contract. For example, a company might offer to buy supplies from a vendor. The buyer offers to pay the seller a certain amount of money for a certain amount of product. In the case of a lease, the lessee offers to pay the lessor for the use of the property.
- Acceptance of the Offer. For the contract to exist, the offer must be accepted. If Landlord B refuses Company A’s offer to pay $1,000 a month for a property, then they probably don’t have a contract. It’s critical to be careful what you say when negotiating a lease to avoid accidentally accepting an offer.
- Consideration for the Offer. This term means something of value. Usually, the consideration is money. In a commercial lease, the lessee might offer to perform a service as part of the rent.
- Competency of the Parties. Sometimes referred to as capacity, this term means that the people signing the contract must understand what they are doing. A person might lack capacity or competency because of an unsound mind, alcohol or drug impairment, or age.
- Legal Purpose. Contracts must be made for a legal purpose and comply with applicable laws. For instance, a contract to steal a car is invalid because it’s illegal to steal a car.
Does the typical commercial lease satisfy the requirements to be an enforceable contract?
A Commercial Lease’s Purpose and Provisions
Commercial leases are legal agreements between the owner or manager of a commercial property to a party that wants to lease that property.
If a landlord or leasing agent offers the property to a lessee for a certain consideration, and
the lessee accepts the offer, and
they all have capacity to understand what they are doing, and
the commercial lease is made for a legal intent,
that generally would mean that a commercial lease is a contract.
Talk to a Florida Business Lawyer About Your Commercial Lease
Leases are often complicated documents full of fine print. In fact, contract law is complex, and most people will find it difficult to understand. We strongly urge you to let an experienced business attorney review your commercial leases and contracts before signing.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.