The nature of a penalty is a payment of money that is set as in the terrorist of the insulting party. As Colman J stated in Lordsvale Finance Plc/Bank of Zambia [1996] QB 752, the question of whether a provision should be treated as a sanction is a question of construction that must be decided by whether, at the time of the conclusion of the contract, the dominant contractual function of the provision was to deter a party from breaching the contract or compensating the innocent party for the breach. The contractual function is more dissuasive than compensatory, can be deducted by comparing the amount to be paid in the event of an infringement with the loss that could occur in the event of an infringement. Limit the damage. An important aspect of this clause is the obligation for both parties to try to minimize the damage caused by a delay. Both the tenant and the landlord must do everything in their power to continue to fulfill their obligations in the rental agreement. This helps not to derail disputes. It should be noted that this type of case is factual. However, the legacy of the case is that, when entering into a lease, it is possible to include a compensation clause in the agreement in order to ensure that the injured party is compensated for the amount negotiated and agreed by the parties. However, such a level of compensation should not be extravagant or ruthless in relation to the likely damage suffered. Otherwise, the indemnification clause will be recognized as a penalty clause and will no longer be applicable. The lessor can only expire if the rental agreement contains an express expiry clause and if, for inhabited residential property, an owner must go to court. If you need advice or assistance with the sale or purchase of inheritance real estate, please contact one of our 5 experienced residence teams.

If you own a property in matters of succession, it is important to be aware of all the tenant`s obligations set out in the rental agreement and to ensure that you comply with them in order to avoid any infringement. In most countries, commercial tenants have a lot of power through the court system and can use it to manipulate or delay a landlord or their property. Owners benefit from finding a lawyer to help them design an effective default clause to avoid such delays and manipulations. This can help avoid problems related to the expiration of the rental agreement. Sometimes tenants refuse to go until the date agreed in the contract. A standard clause can prevent this. Rights of the tenant. The rights of the tenant are more general. In the case of a lease, the tenant negotiates the right to use the premises, while the lessor negotiates rental income.

It is more difficult to predict how the landlord may be late and influence the tenant`s use of the premises. In this context, most clauses maintain it general in order to best protect the rights of the tenant. In a commercial lease agreement, you must insert a standard clause that effectively allows the lessor to require its tenants to meet all the requirements of the contract. Typically, a standard clause in a rental agreement provides an explanation of how an evacuation should be carried out if the tenant fails to comply with their obligations or violates a rule of the contract. The appropriate repair of a given service can be used to force a tenant to carry out repair work. Or, if the tenant performs or has performed unauthorized work or has violated the assignment provisions of the rental agreement (illegal separation of ownership from the premises), an injunction may be used. The primary purpose of a non-lease clause is to provide the landlord with the legal means to: Case analysis In Ip Ming Kin, a.a.O., in December 2009, the plaintiff tenant (“tenant”) had tried to rent the premises of the defendant owner (“landlord”). They entered into a rental agreement in a standard form in Chinese form, in which the landlord agreed to rent the store for 12 months at a monthly rent of HK of $17,300 to the tenant…