Guarantor liable for lease renewal period when silence implies mutual exercise of renewal option.
Cipro (CY)
Sintesi Legislator
Generato dall'IAThe court dismissed the appeal against a guarantor, holding that his liability extended to the lease renewal period. The lease contained a clause allowing automatic one-year extension if neither party notified the other two months prior to expiration. By remaining silent after ten months, both parties exercised their renewal rights, making the subsequent liabilities covered by the guarantee. The court ruled the guarantor's obligation was co-extensive with the principal tenant's duties throughout the entire extended term.
Regesto Legislator
Generato dall'IAContract of lease; Guarantee clause: Where a lease contract includes an option for renewal by mutual silence and a guarantee clause covers the exact performance of all contract terms, the guarantor's liability extends to the period following the exercise of the renewal option.
Parole chiave
Generato dall'IADecisioni correlate
Generato dall'IATesto completo
[*359] 1966 March 11
(ZEKIA, P., TRIANTAEYLLIDES, JOSEPHIDES, JJ.)
APPELLATE JURRISDICTION
Demetrios Michael,
Appellant-Defendant,
v.
Haig Nishanian,
Respondent-Plaintiff.
(Civil Appeal No.4550).
Landlord and Tenant - Lease - Contract of lease - For a term of one year and option of renewal, by both, parties, for another - Option exercised by both parties - Guarantee clause - Liabilities following the exercise of right of renewal covered by guarantee clause - Guarantor's liability co-extensive with that of the principal.
Contract - Lease - Guarantee clause - See under "Landlord and Tenant" above.
Guarantee - Guarantee clause in contract of lease - See under "Landlord and Tenant" above.
Lease - Contract of lease - See under "Landlord and Tenant" above.
Char, Ioannides, for the Appellant.
S. Devletian, for the Respondent.
JUDGMENT
The Judgment of the Court was delivered by:-
ZEKIA, P.: We shall not call upon the Respondent. We shall proceed to deliver the judgment.
The Appellant in this case was a guarantor in a contract of lease which was put in and which is in the file of the case.* There is express provision in this contract [*360] that the duration of the lease was for a year. Clause 8 of the said, contract provides that, unless either party to the contract informs the other to the contrary two months prior to the expiration of the lease, the lease shall be deemed to. he extended for another year.
Considering the express provision that the period of the lease was for one year, then the construction to be placed on clause 8 could be nothing else than a right of renewal for another year reserved to the parties. So, it appears that, by keeping silence after the expiration of ten months from the date on which the contract was signed, the option for the renewal had been exercised by both parties and the lease was extended for another year.
Another relevant important clause In this contract is the guarantee clause. This clause is so worded in our view, as to render the guarantor's liability co-extensive with that of the principal. It provides expressly that the guarantor undertakes the exact performance of all the terms included in the contract of lease. The right to renew the lease for another year being embodied in the terms of the contract, the liabilities following the exercise of such right are covered by the guarantee clause.
We have carefully studied the contents of the contract of lease in question in the light of the submission of the learned counsel for the appellant and we have come to the conclusion that the guarantee signed by the Appellant (guarantor) covered the liability of the principal (tenant) to pay rents and damages until the latter delivered vacant possession of the premises leased by the landlord, the Respondent. The appeal is, therefore, dismissed with costs.[*361]
There was a cross-appeal. It appears that both parties agreed to a variation of the judgment of the lower court which variation relates to the sum of £22 as costs adjudged. This figure should be increased to £30. The judgment of the District Court is, therefore, varied accordingly.
JOSEPHIDES, J.: Any amount paid by the first defendant (tenant) towards the sum of £22 costs against him shall be credited against the above sum of £30 costs under the judgment of the District Court.
Appeal dismissed
with costs.
By consent, judgment of
the District Court as
regards costs adjudged,
varied accordingly.
The material parts of the contract of lease referred to in the above Judgment are given below:-
Contract of Lease
Owner: Mr. Haig B. Nishanian.
Lessee: Mr. Michalakis Colombos.
Leased presises: Outbuilding situated at No.187A,
Limassol at No.1 6th June Street.
Duration of Lease: One year from 14th July, 1962.
Price of Lease: £12 (twelve pounds) per month.
Payment of rent: Payable monthly in advance through
Ottoman Bank or in cash against receipt. [*362
If at the expiration of the period of lease the lessee fails to vacate and deliver the said premises to the owner he will be bound to compensate the owner £1,000. mils per day in respect of any number of days that might elapse between the termination and the delivery, as well as to pay all court fees and advocate's fees necessary for ejecting him from the said premises.
Two months before the termination of the lease each of the contracting parties is entitled to notify the other about the termination of the lease agreement, If not, the obligation continues in force for one year under the above terms.
The undersigned Mr. Demetrios Michael guarantee jointly with the lessee the exact performance by him of the above terms of the contract, as well as the regular payment of the rent and/or damages in the event of his contravening any term.
The guarantor
(Sgd) Demetrios Michael.
* Note: The material parts of the contract of lease are given