Don't Put Stock in Oral Promises

Under unusual circumstances, an oral understanding may lead to a legally enforceable contract. But in the leasing area, that's rarely the case.

For example, let's say a retail tenant wants to terminate its lease early, leading the owner to begin discussions with a potential new tenant. The parties exchange letters of intent, which results in the owner permitting the existing tenant to terminate. Here, the owner acts on the potential tenant's oral assurances that the approval of its real estate committee means the tenant will lease the space. But if the potential tenant eventually ends negotiations with the owner, would the owner prevail in a legal action?

Almost definitely not, say legal experts. The owner should not have relied on oral assurances about leasing the premises.