How Long Do I Have To Wait?

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There’s a song, Hesitation Blues, first recorded in 1916, that begins with this line: “How long do I have to wait?” It is also a question often asked when a lease or other agreement is silent as to a deadline or permissible period. And, almost always, that question is asked when something has gone wrong. That’s evidence it should be asked at the outset when people memorialize their agreement or expectations.

We just looked at an August 12 decision by a New York lower court. In it, the judge wrote what is generally the law:

Even absent a fixed date to satisfy an obligation imposed by contract, a contractual party still must perform within a reasonable time. 

Whether or not a given period of delay is “reasonable” for these purposes “depends upon the facts and circumstances of the particular case, including the subject matter of the contract, the situation of the parties, their intention, what they contemplated at the time the contract was made, and the circumstances surrounding performance.”

To us, these principles make sense. In the absence of a specific agreement, we expect that parties working together will be reasonable. However, the problem is that “reasonable” is in the eye of the beholder, and beholders possess self-interest. The facts (or allegations) presented to the New York court illustrate this point.

A lease was signed in March of 2015. The premises did not yet exist, but the shopping center’s expected grand opening date was the following October, only seven months away. The landlord had work to do in order to get the center and the leased space ready. The tenant wanted advance notice of an expected completion date so that it could mobilize, order inventory, hire staff, and otherwise be prepared to open for business. To meet those needs, the lease provided that the landlord:

shall endeavor to give tenant at least two hundred seventy (270) days prior notice … of the date landlord reasonably anticipates the delivery date will occur.

The lease defined the estimated delivery date as the “reasonably anticipated date.” The landlord didn’t have to deliver the leased space on that anticipated delivery date, something the lease also called the “estimated delivery date.” Even the use of the words “anticipated” and “estimated” made that clear. But, the tenant wasn’t without a remedy if the landlord didn’t turn the space over to its tenant on that date. The lease covered that possibility by saying:

if for any reason whatsoever … the delivery date has not occurred prior to such date that is eighteen months from the estimated delivery date … this lease shall be automatically terminated.

So far, so good. But, the lease never obligated the landlord to deliver the space within any given period. It didn’t even require the landlord to provide notice of an anticipated or estimated delivery date. And, it did neither – not by the 48th month after the expected grand opening date (55 months after the lease was signed). The tenant was left twisting in the wind. It was obligated under a lease to occupy the premises when completed, yet it was already four years after when it expected to see a functioning shopping center. The nine-month notice that the space would be ready still had not been sent.

So, the tenant asked a court to terminate its lease, one with only a ten-year term. The landlord still wouldn’t throw in the sponge and let the tenant go. Even though adding a nine-month notice period to the 55 months that had already passed would mean that the tenant would have waited more than five years to begin business at the property, the landlord wasn’t willing to part with its tenant. It claimed that the tenant had no remedy and would have to wait until the landlord was “good and ready” (our interpretation, not the landlord’s words). The landlord’s argument was characterized by the court as follows:

Section 5.03 provides that [the landlord] shall not “be liable for damages or otherwise as a. result of any failure to make the Premises available within the time and/or in the condition provided in this Lease”; and also that such a failure to make the premises available would not “permit Tenant to rescind or terminate this Lease except as otherwise expressly set forth in Section 5.04 below.” … And as noted above, § 5.04 provides for termination of the lease only if more than 18 months have elapsed from the estimated date of delivery without actual delivery occurring.

If the landlord’s position prevailed, we could be writing this blog posting a hundred or more years from now (assuming Guinness World Records was ready to list us as the then-oldest living person).

Here, the court had a way to cut a break for the tenant, one that might not have been available had the cited “exculpatory” provision been a bit more comprehensive. As written, Section 5.03 allowed the court to find the following:

This exculpatory language is best read as applying only to actual delivery of the premises, not to the setting of an estimated date for delivery. To “make the premises available” to [the tenant] is most naturally understood as referring to the act of delivering the premises itself. Additionally, the lease shields [the landlord] only for failing to “make the premises available… within the time … provided in this Lease” …; and the only deadline set by the lease that relates to making the premises available to [the tenant], the 18-month period of § 5.04, governs delivery. Moreover, § 5.03 itself provides that its exculpatory language constitutes an exception to what would otherwise be [the landlord’s] default obligation under [New York law] to deliver the premises to [the tenant] at commencement of the lease.

Basically, the tenant’s breach of contract claim relied on its landlord’s failure to provide an estimated delivery date, not on the failure to deliver the premises by a given time. In the court’s words, “This [was] not a merely technical distinction.”

We don’t know how this has or will turn out because the court decision we looked at [one that can be read by clicking: HERE] was only to decide if the case could move to a full trial, one that might be years away. (Add that to the 55 months that had already transpired). Why wouldn’t or couldn’t this court decide that the wait had already been “too long”? That’s because what is a reasonable time to wait “depends upon the facts and circumstances of the particular case, including the subject matter of the contract, the situation of the parties, their intention, what they contemplated at the time the contract was made, and the circumstances surrounding performance.” And, for that determination, the parties had to develop facts about “the contract, the situation of the parties, their intention, what they contemplated at the time the contract was made, and the circumstances surrounding performance.”

Now, we blame the tenant here for signing the lease without an outside date. Optimism is not a circuit breaker. Hopes and expectations aren’t one. A landlord’s best intentions aren’t. The tenant potentially got an obligation to open for business years and years after it wanted to do so. Whereas absent a court’s intervention, its landlord could sit around until it was good and ready, knowing that it had a binding lease. Assuming that tenant wanted to have a store in that marketplace, its desire was frustrated because it was already bound to open at a space that wasn’t available.

Now, we think everyone knows that there should have been an outside delivery date for this space. So, what went wrong? We’ll give this tenant the benefit of the doubt and assume that it just overlooked the omission. Boo! But, disturbingly, this isn’t the first time or even the tenth time we’ve seen this. That’s only counting situations where the absence of an “outside” date was a problem. How many leases and other agreements suffer from this same deficiency, but where everything went as expected.

What do we suggest? That’s simple. The words, “Outside date?” should be the first line and the last line on every drafting checklist. And, yes, everyone should use a checklist. You don’t want to fly on an airline that doesn’t use them. You shouldn’t want to negotiate agreements without them.



  1. “no later than” dates and “drop dead” dates are critical components of performance constructs. In their absence, well-intentioned (and, often, assumed) expectations collide with reality. “anticipated” and “estimated” are not only superfluous in the cited context, they establish un-anchored expectations that (clearly, in this case) leave poop floating in the pool.

    The tenant was careless and disregarded the laws of nature by assuming that “delivery” would take place within a time frame that would be acceptable to it. I have many thoughts about assumptions. Here are three:

    Assumptions are fun to make if the consequences don’t matter.

    Assuming anything is like walking around with your kimono open. You expose yourself unnecessarily.

    Assuming is like riding a bicycle with your eyes closed. Eventually, the hard road meets your face.

  2. Randall Gunn says

    I understand the concern of the tenant for the open date but, at the same time I have an understanding for the landlord developer IF, as the article indicates, the building was under development and construction. I have engaged in real estate transactions in 20 states and three provinces of Canada. I have been involved in some way or another with over 2,000 retail locations. Attorney for 35 years but retired. First neighborhood association meeting at age 15. That being said, it is a complete “crap shoot” in many jurisdictions predicting the time needed for site development permits, building permits, the vagaries and deliberate contradictions / roadblocks of the development process. Every rational developer has investigation periods, due diligence periods, permitting periods, etc. in the land purchase contracts. The worst task for any developer is going back to the seller to say you need additional time to get through permits and approvals. It will take at least a year to get approvals and it is not unheard of to have 2 years or more.

    I fully expect at least two rounds of comments from staff and I expect comments from one round to contradict a comment in a previous round. I have had county staff deliver the counties recommendation to the neighborhood association and then the association will advise me/the applicant which county government staff comments they will or will not accept. I know there could be demands from the neighborhood to save trees on the site that my certified arborist indicate are NOT present on the site. If we are in some markets I have to get the approval of a neighborhood committee to accept the tenants in the development as “sufficiently local” Every developer has a litany of war/horror stories.

    I have been with retailers who have to meet quarterly store opening goals but at the same time, there are very legitimate reasons for the landlord developer to honestly assert that they have negligible control over the time for development and construction.

  3. Elliot L. Warm,. General Counsel says

    Understood, Randall, but that only means that a fair negotiation would produce an outside date that works for both parties – maybe with extensions as long as the landlord can demonstrate its good faith efforts all along and the then current status. There has to be some date. The parties can always agree to extend if that is in the common interests of both, and maybe the landlord has to agree to reimburse some tenant costs as a price for the tenant to stay put for an inordinately long time. It’s all a business matter, but the one thing we know is that uncertainty and ambiguity only means it’s a good business matter for the litigation lawyers.

    • Randall Gunn says

      I try to keep the litigation attorneys as far away from a business negotiation and transactional decision as possible. Litigation has a place but it should always be the last resort. Having been on the corporate side most of my career and having business responsibilities in addition to legal, nobody wins in litigation except the litigation attorneys. An imperfect deal/resolution today is better than going through litigation.

      • Elliot L. Warm,. General Counsel says

        True, in that all deals are “imperfect” for each side to the transaction, but I do understand the further point that even a deal with some unfairness to a particular party may be better than an uncertain one that leads to litigation where nobody actually wins.

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