lease with 'Draft' printed across each page, enforceable or not?

Hi

If the lease document for a commercial lease has 'DRAFT' written across it (on each page), i.e as a large watermark.. would such a lease be enforceable in court?, even if signed by both parties?


Cheers

The Court will ask, if there is a dispute, what were the intentions of the parties?

If the parties intended that the Lease would be binding, a court will hold that. If its a case that one of the parties did intend it at the time but is now looking for a way out, it might be worth visualising themselves standing in front of a Judge ( Mary Laffoy being one of my favourites in this regard) when the Judge says : what did you think you were doing when you signed it so?

mf

yes, i agree, to an extent.

What if some things were verbally agreed, but the fine print of the lease contradicts the verbally agreed things? Then one party can legimately say that they didn't intend to sign the lease as written...

Can one party say that they signed the lease because they believed it to be un-enforceable, due to Draft being written all over it? (and so they didn't bother ensuring that they agreed with the clauses, as their belief was that all the clauses were unenforceable anyway)... it could also be said that their intention was to 'trick' the other party, to a degree. But one party is only looking out for his own interests, .. would he be expected to advise the other party of perceived problems? Business is all about 'tricking' the other party, to a degree...

'Trick' may be the wrong word, .. the argument is quite subtle.

to clarify the main point...

one party signed the lease, not because they wanted it to be binding, but because they believed it to be unenforceable, and that the other party was making a mistake.

What happens then?, is the lease enforceable?

"one party signed the lease, not because they wanted it to be binding, but because they believed it to be unenforceable, and that the other party was making a mistake."

Think of a stronger word than "nonsense"! This is a totally nonsense argument.

Its called the argument after the event. and again
"it might be worth visualising themselves standing in front of a Judge ( Mary Laffoy being one of my favourites in this regard) when the Judge says : what did you think you were doing when you signed it so?"

Its not an argument I would run or even could run while keeping a straight face.

mf

Well to be honest I disagree...

What's wrong with the argument?

It's two sided anyway... what would a professional leasing company say when asked by the Judge, 'why made you think that a lease marked 'draft' would be acceptable to the court?, surely a professional company would understand what makes a legitimate lease... '... is there any appropriate answer to this?

The answer to the judges question you posed would be 'I thought I was taking advantage of a silly and unprofessional company, .. I believed the lease to be nonsense and un-enforceable, and I didn't believe it to be binding on me, due to the fact it says Draft all over it'

It's a hypothetical question.


But considering many of the defences used in court it doesn't sound that outrageous to me. My point is that the judge can hardly say that the state of mind of the signee was that the lease would be binding, when the person themselves vehemently deny it, and they offer a reasonable explanation as to why they had that frame of mind.

If (a) Joe and I made a deal that Joe believed was unenforceable and I believed was a proper contract and (b) if I honoured the agreement and Joe honoured, or represented himself as honouring, the agreement, there is a threshold that gets crossed where it develops into a binding contract.

The question revolves about Joe giving the impression of being bound and then claiming that he never regarded himself as being bound.

My memory does not drag up any case law in support of what I say.

well yes, that's where the element of trickery comes in.


But there remains the question as to why the other party was happy with a lease marked 'draft'.. it could be argued that they were also intending to use a similar defence in the event of an attempt to enforce a clause... i.e it's not clear that they considered themselves bound, we only have their word for that, if in fact they do claim that.

It comes across as very unprofessional to me... for a professional company to use a lease that has no page numbers, no contents page, that isn't signed on every page, and that has Draft all over it... either party can then remove or add pages and claim they were there or not there all along... there doesn't seem to be any way to resove such difficulties... so it woudl be a matter for the courts.

So perhaps there would be a greater onus on the more profesisonal (or experienced) party to ensure these problems don't exist... I believe it could be said that there was an element of trickery on both sides... and only on the leasee's side if he claims he considered himself not bound... he could also claim to have entered the agreement in good faith believing it to be binding, and then all the trickery, or perceived trickery would be on the professionals side.


Overall, it seems that this would be a poor lease if it had been drawn up by a solicitor.


Would a solicitor advise signing such a lease?, or would they insist on page numbers etc, and signing on each page (or else signing a contents page, with the total number of pages on it), and I'd imagine a solicitor would insist on the word Draft being removed. If these things are not done then there is the problem with removing or adding pages.

God almighty. And people give out about solicitors.

Sadly this isn't even the most stupid thing I've ever heard in practice.

JoeBallantin said:

...
It comes across as very unprofessional to me... for a professional company to use a lease that has no page numbers, no contents page, that isn't signed on every page, and that has Draft all over it... either party can then remove or add pages and claim they were there or not there all along... there doesn't seem to be any way to resove such difficulties... so it woudl be a matter for the courts.
....

Click to expand...

A lease can be drawn up on the back of a cornflakes box if the parties are willing to sign it, and it covers the requirements of the Statute of Frauds.


There are a couple of points to raise here
1. Casey v Irish Intercontinental Bank - a solicitors letter repudiating the existence of a contract was actually found to be sufficient evidence of the existence of the contract to make it enforceable.
2. The legal principle that an agreement to a lease is as good as a lease.

Because of the above there's a fair chance a judge would hold that the lease as outlined by the OP is enforceable *** because both parties signed it, clearly indicating that they intended to enter a lease on those terms, or at least on very similar terms.




***Obviously subject to the particular circumstances of the situation.

Well, thanks for all the comments.

What would people be saying if a lease had 'VOID' or 'SAMPLE' or 'NOT REAL' written across each page?.. would the responses be the same? (especially 'VOID'?)

Those banks that produce promotional cheques with 'void' on them better watch out!.. people might start cashing them!


On the Casey v Intercontentential Bank the only info I have is this..
(from http://www.lawreform.ie/_fileupload/Reports/rGazumping.htm)
In Casey v. Irish Intercontinental Bank38 the court held that there was a concluded oral agreement, and the phrase “subject to contract and title”39 was introduced only at the time, when the memorandum was created. The court took the view that it was therefore not a term of the contract and could not be introduced unilaterally at a later stage. Thus a memorandum which satisfied the Statute of Frauds existed, despite the fact that it denied the existence of a contract. This was a “gazumping” case: agreement on all essential matters had been reached and the purchaser had been given the keys, but the vendor sought to renege on the contract when he received a substantially higher offer.
(my emphasis)



I accept that agreements can be verbally agreed.. but really I'm asking about particular clauses... in the absense of an acceptable written lease then the individual clauses could be disputed,.. while the existence of a lease may be agreed the exact terms wouldn't be defined.

Sure, clauses could be disputed, but if the lease were held to be valid, it would be up to the person contesting it to show evidence that that clause wasn't agreed.

A lease agreement is an oral agreement, like any contract relating to land (albeit one that must be evidenced in writing). The signed document is written evidence. The dummy cheques are different as there's no pre-existing agreement.

Joe there are so many things wrong with your argument that its hard to know where to start.

You entered into a lease and presumably you took possession of the property. You signed a lease, which was marked with the word "draft". This lease recorded the terms on which the other party believed that the lease was made. You knew or should have known that the other party believed this. You signed the lease, believing that it could not be enforced against you, but deliberately not telling the other side this, in order to get something from the other side that they would not otherwise have given you. In other words you deliberately misrepresented your position to the other side. You lied. Now you want to break the lease, and you want to rely on your own misrepresentation in order to do so.

Can you imagine making that argument to a judge, really?

And would your response be the same if the lease had 'VOID' on it?

Yes.

Joe Ballantine

You are bound by what you sign.

No judge would be impressed by your arguments on this.

I still don't agree fully.

What about the problem with incomplete NAMA documentation? Some properties have been transferred to NAMA for no consideration at all... i.e 0%.. due to problems with the documentation being in error or incomplete.

Why doesn't NAMA simply ignore the problems with the documentation, as suggested by most posters in this thread, and why don't NAMA or the banks go to court on the basis of 'intentions', and the fact that property loans are given out on the basis of been secured against property, and on the basis that loans should be paid back?

Is it true that the developers in these cases of improper documentation are being let off the loans, with no comeback or sanction at all? Why would this be?

Question asked and answered.

aj
(moderator)