Sign Prohibition Doesn't Constitute Breach by Owner

Facts: A shopping center tenant sought the owner's approval, on two occasions, to put up a sign advertising low-priced shoes. The owner rejected the banner each time, objecting to the sign's advertising low-price merchandise.

Ultimately, the tenant closed the store and stopped paying rent. The tenant argued that it should be allowed to get out of the lease because the owner had breached—that is, violated—the lease by refusing to allow the posting of the sign. The owner sued the tenant to enforce the lease and asked the court to rule in its favor without a trial.

Decision: A Mississippi trial court ruled in favor of the owner.

Reasoning: The court found that the tenant knew early on that the owner would not approve the signage, but continued to operate under the same lease terms for a substantial amount of time. The tenant therefore had waived its right to raise the owner's alleged lease violation as a defense.

Westland Shopping Center v. Chernin's, November 2007

Editor's Note: The right to use a lease breach as a defense may not be available if the parties continue to operate under the lease terms after discovering that the breach has occurred.