Break clause: implied term for M&S
The High Court delivered a controversial judgment on 16 May 2013 in the case of Marks and Spencer Plc v BNP Paribas Security Services Trust Company (Jersey) Ltd and Another.
Marks and Spencer (M&S) was the tenant under four leases of an office building in Paddington. The leases were all in the same form. Briefly, the relevant terms were: the leases were granted for a term starting on 25 January 2006, expiring on 2 February 2018; rent was payable quarterly in advance on the usual quarter days; the leases contained break clauses allowing M&S to terminate the leases on 24 January 2012 (the break date); and the breaks were conditional on there being no arrears of rent or VAT at the break date and the payment of a year’s rent (being a substantial sum) on or before the break date.
M&S served notice to break the leases and paid the full quarter due in advance on 25 December 2011. M&S also paid the penalty amount of one year’s rent and so it satisfied the break conditions…
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