Question
Assume that on January 1, 2020, Belinda Baird signed a contract with Andy Andrews to lease 1,000 square feet of space in a 5,000 square
Assume that on January 1, 2020, Belinda Baird signed a contract with Andy Andrews to lease 1,000 square feet of space in a 5,000 square foot commercial mall in Houston, Texas in order to open a clothing store called "BB's Casual Clothes." The contract provided, in pertinent part:
- The term of this lease is 5 years, from January 1, 2020 until December 31, 2024.
- Tenant will initially pay $2,000 per month in rent, due on the first of each month.
- After one year, the parties agree to negotiate for a new fair rental rate. After two years, either party may terminate this lease upon giving 3 months' notice.
- No similar clothing stores will be leased to anyone else during the term of this lease.
Prior to signing the lease, Baird had said to Andrews, "I assume no other clothing stores will be allowed in the mall." Andrews replied, "Don't worry. Clause (5) in the contract covers that."
Baird opened her clothing store on February 1, 2020. Baird got most of her stock from buying at steep discount prices excess clothes not sold at Target, J.C. Penneys, and other such outlets, and then marking them up 50%, but still sold for less than they were originally marked. Her employment agreement provided for her employees to earn $10.00 an hour. In order to provide a bonus for hard, prompt work, the contract also provided "a $500 bonus per month for any employee who was never late for work and for whom no customer complaints were made during the preceding month."
For February-April, 2020, Baird's store attracted a good supply of customers. During this time, after rent, employee costs, and other overhead expenses, Baird was making $10,000 a month in profits. Andrews, however, could not sell one of the remaining 1,000 square foot spaces. Finally, on April 27, 2020, Andrews got an offer from Old Navy to take that space. Andrews promptly sent an e-mail to the other tenants about that. Immediately, Baird e-mailed back, "You can't do that. You promised no other clothing stores, remember?" Andrews responded, "Out· written contract says no similar clothing stores, and Old Navy is not similar, since you are a discount clothes store, and Old Navy is not. If you hassle me about this, you may be out as a tenant yourself at the end of this year."
On the same day, John Jacobs, a customer, went up to Baird and complained about Melinda Mason, who was working shelving clothes. His complaint was she that did not stop her work and help him select some shirts he wanted to buy. Although Baird acknowledged that the complaint was unreasonable, since another employee had offered to help him, Baird was in a bad mood because of the Andrews e-mail, and Baird told Mason that because of that customer complaint she is not eligible for the $500 bonus.
Assume it is May 1, 2020, and Baird has come to you for advice. Baird wants to know:
(1) whether her oral statements to Andrews could be admitted given the parol evidence rule;
(2) if admitted, is the agreement breached and could she get an injunction to prevent leasing to Old Navy;
(3) can she require Andrews to renew at a fair rental price at the end of the year; and (4) is Mason entitled to the bonus.
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