On Aug. 19, 2014, the Superior Court of Pennsylvania reached a decision as to the proper measure of damages for a tenant’s breach of a shopping center lease. The court’s decision has important implications for practitioners negotiating damages clauses, in particular when drafting language imposing a duty to mitigate or discounting lost rent damages to present value.

Newman Development Group of Pottstown LLC (the landlord) sued Genuardi’s Family Market Inc. and Safeway Inc. (the tenant) for an anticipatory breach of a lease for property in Chester County, Pa.’s Town Square Plaza. The parties had entered into a 20-year lease in April 2000, but the lease included specific deadlines for building permits that proved impractical in light of opposition to the project, according to the opinion in Newman Development Group of Pottstown v. Genuardi’s Family Market, No. 744 EDA 2010 (decided Aug. 19, 2014). Consequently, the parties agreed to hold the lease in escrow pursuant to an escrow agreement that gave each party the right to terminate the lease if the landlord was unable to fulfill a co-tenancy condition requiring a sale or lease to Target or Lowe’s within one year from the date landlord acquired the property. The landlord had yet to acquire the property, as its purchase was conditioned on certain approvals and rezoning of the property.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]