We wanted to a “hit and run” this week based on what we think is a peculiar and wrong court decision about language in a personal guaranty. Then, we came across a second court decision concerning a guaranty, though with no other connection to the “peculiar” one. Given that electrons are plentiful and essentially free, we’ve chosen to tell readers about the later-discovered one first.
The story begins with a 15-year lease that was assigned by the named tenant to a successor only five months after the lease terms started. In connection with that assignment, a guaranty was given to the landlord, one in which the guarantor guaranteed:
[T]he payment and performance by the [a]ssignee of all its obligations under the [l]ease and all of the obligations of the [t]enant as defined under the [l]ease effective as of the date hereof.
The awkwardness of that text is immaterial to what then happened. About 2-1/2 years later, the lease was further assigned. In connection with this second assignment, the guarantor, in a writing dated about a month later, “confirmed that its guarantee would remain in effect despite [this] assignment….” Then, about eight years after that, the shares of the then tenant were acquired by yet another “tenant,” actually the same one, but with a new shareholder. The parent company of the new shareholder guaranteed the tenant’s lease obligations, the landlord waived its right to cancel the lease by reason of the shareholder change, and, importantly, the landlord received another letter from the original, lease-signing tenant. That letter confirmed the ongoing validity of the original guaranty, using the following language: [Read more…]
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By now, almost everyone knows that an Acord Certificate of Insurance isn’t worth the paper it is printed on. [Click 
We just looked at a court decision about a lease renewal notice and can’t make up our mind what we think about the result or about the wisdom of the issue having been litigated in the first place. We’ll begin with the story and conclude with the “wisdom” part.
“A committee is a cul-de-sac into which ideas are lured and then quietly strangled” — Sir Barnett Cocks. Much the same can be said about the documents we read and, sadly, write. Sir Cocks didn’t necessarily mean only that ideas were strangled to death. We want to think he also was thinking about damaged survivors, the ones that survived, but with a life-long injury.
There is so much to say about purchase rights: straightforward ones, rights of first refusal, rights of first offer, rights of last offer, and rights of first notice). There is so little time to do so. [For those with time to spare, click
We don’t know if there are more ways to write a purchase option in a lease “wrong” than right,” but we do know opportunities abound. Here are a couple of examples. The first is based on a statement of California law within a court opinion from March of 2018. [See it by clicking: 
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