Tenant Couldn't Withdraw from Lease

July 31, 2002

A beauty salon tenant signed a lease for space and sent it to the owner's leasing agent. The tenant later sent the agent a letter saying that it was withdrawing from its “offer to lease.” When the tenant failed to pay rent, the owner sued, claiming that the tenant violated the lease. The tenant argued that there wasn't any lease because the tenant hadn't gotten a signed acceptance of the “offer,” its deposit check wasn't cashed, the space wasn't suitable for its intended use, and there was a competing beauty salon in the center.

A beauty salon tenant signed a lease for space and sent it to the owner's leasing agent. The tenant later sent the agent a letter saying that it was withdrawing from its “offer to lease.” When the tenant failed to pay rent, the owner sued, claiming that the tenant violated the lease. The tenant argued that there wasn't any lease because the tenant hadn't gotten a signed acceptance of the “offer,” its deposit check wasn't cashed, the space wasn't suitable for its intended use, and there was a competing beauty salon in the center. The owner asked the court to dismiss the tenant's argument.

A Texas appeals court dismissed the tenant's argument. The court noted that a party can withdraw from a lease before a lease is signed by both parties. The court said that because the owner signed the lease four days after the tenant had signed it, and the tenant's letter of withdrawal was dated 18 days after the lease was signed by both parties, the tenant's attempt to withdraw from the lease was too late and “ineffective” [Carter v. Plano Prairie Partners, Ltd.].

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