Tenant Can't Rely on Oral Promises that Contradict Written Lease

September 30, 2002

A clothing store tenant's lease had an “integration clause” that said the written lease contained the parties' entire agreement. The lease also said that the owner wasn't responsible for the center's profitability or occupancy. When restaurant and retail tenants failed to open in the center as scheduled, the tenant said it had suffered financial losses and sued the owner. The tenant claimed that the owner had made oral promises about the center's occupancy and profitability.

A clothing store tenant's lease had an “integration clause” that said the written lease contained the parties' entire agreement. The lease also said that the owner wasn't responsible for the center's profitability or occupancy. When restaurant and retail tenants failed to open in the center as scheduled, the tenant said it had suffered financial losses and sued the owner. The tenant claimed that the owner had made oral promises about the center's occupancy and profitability.

A California appeals court ruled that the tenant couldn't introduce proof of the oral promises and dismissed the tenant's lawsuit. The court noted that the lease said the owner wasn't responsible for the center's profitability or occupancy, so any oral promises to that effect contradicted the lease. To allow the oral promises into evidence would violate the integration clause, the court said. The court ordered the tenant to pay over $3,000 in costs and over $80,000 in attorney's fees to the owner [Saint-Tropez Stores, Inc. v. Rodeo Collection, Ltd.].

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