Tenant Didn't Use 'Best Efforts' to Get Liquor License

December 1, 2002

A lease was contingent on the tenant's using its “best efforts” to get a liquor license. The lease said that if the tenant tried but couldn't get a liquor license within 90 days of Sept. 1—the lease's effective date—the lease would automatically terminate. On Dec. 22, the tenant told the owner that it couldn't get a liquor license despite “making every effort possible” to get one. The owner sued the tenant for violating the lease, claiming that it didn't use its best efforts to get the liquor license.

A lease was contingent on the tenant's using its “best efforts” to get a liquor license. The lease said that if the tenant tried but couldn't get a liquor license within 90 days of Sept. 1—the lease's effective date—the lease would automatically terminate. On Dec. 22, the tenant told the owner that it couldn't get a liquor license despite “making every effort possible” to get one. The owner sued the tenant for violating the lease, claiming that it didn't use its best efforts to get the liquor license.

A California appeals court ruled that the tenant hadn't used its best efforts to get a liquor license. The court said that the tenant knew it had only until Dec. 1 to get a liquor license, yet it didn't sign the liquor license application paperwork until Oct. 23 and didn't post a sign at the location, as required, until Nov. 23. So the court sent the case back to the lower court for further proceedings [Krinsky v. Long Beach Wings].

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