While the words that comprise a contract spell out its terms, sometimes the parties’ actions can override the words. This was the result in a case recently decided by the Court of Appeals for Cuyahoga County in 367 Green Road Co., Ltd, v. Specialized Component Sales Co., Inc. in a breach of lease case.
In 1981, the parties entered into a lease agreement. In 2003, the tenant explained to the landlord that, because of declining business, the tenant would have to move unless the landlord reduced the monthly rent of $1824. From that point on, the landlord accepted monthly rent of $1473. This was all done orally.
In 2012, the landlord told the tenant it would either have to vacate part of the space it occupied or pay an additional $1800 in monthly rent. Rejecting the rent increase, the tenant moved out. The landlord filed suit, claiming as damages the difference over a two-year period between the $1824 rent stated in the lease and the $1473 the tenant had been paying. The tenant argued that the rent amount had been orally modified. In turn, the landlord pointed to a lease provision that stated no waiver of any rights could be implied by the landlord’s failure to enforce a right.
The court sided with the tenant. While “no waiver” provisions are enforceable, the landlord’s acceptance of the lower rent amount for some eight years evidenced that the landlord was waiving its right to collect the full $1824 per month..Significantly, the landlord’s books reflected a zero balance owed by the tenant, further evidencing that the landlord had been accepting the lower payments as payment in full.
In this case, the law is much the same as what your mother used to tell you when you were a kid: “Actions speak louder than words.”
