Untangling Tenants From their Invitees and Licensees

Last Updated on Monday, 11 June 2018 09:15 Written by Chris Griswold Monday, 11 June 2018 09:15

Tenants in commercial leases are liable for a lot.  In some cases, they’re even liable for the acts, omissions and negligence of their invitees (customers) and licensees (sub-contractors, vendors, kiosk operators, christmas tree/pumpkin parking lot sales outfits, etc…) – but they don’t have to be if the lease is well written.  Good stuff.  See more below (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Untangling Tenants From their Invitees and Licensees

Question #1:  So what is the big deal for a Tenant to be liable for these groups?

Answer:  Well, ultimately, it’s a mark down on that Tenant’s profitability.  It’s an added cost of doing business, on top of taxes, rent, employee salaries and benefits, CAM, and the list is customarily long.  So, why add one more item to it?

Question #2:  How can a commercial tenant ensure that it’s not liable?

Answer:  The lease has to carve out a Tenant’s liability for these groups.  It’s one thing (and normal) for a Tenant to be liable for its own officers, directors and employees, but, it’s another for that Tenant to be liable for other extended persons which are not under the control or direction of Tenant – that extension/enlargement beyond the Tenant’s officers, directors and employees is what must be examined closely before a lease is finalized.

Question #3:  Is there anything more at risk in this situation?

AnswerYes.  If Tenant fails to eliminate this extension of liability, it will cost not only Tenant, but possibly the Tenant’s Landlord as well, unless the Landlord puts language into the same Lease that makes the General Liability coverage that Landlord carries subject to carve-outs that Landlord’s General Liability coverage shall all be secondary, non-primary, excess and non-contributory to Tenant’s coverage, as well as making Landlord’s coverage further subject to a Waiver of Subrogation clause in the Lease.

Question #4:  What should Landlord’s really do?

AnswerIn diametric opposition to the statements in Question/Answer #2 above (which are to Tenant’s favor), Landlord’s shouldn’t let a lease get written that allows Tenant to avoid liability for the acts, omissions and negligence of such Tenant’s invitees and licensees.  In other words, Landlord wants Tenant to be liable for these – or they become Landlord’s liability.  Remember, leases are the product of good negotiation and the parties need to know what points are really important to them, and then act accordingly.

Question #5:  Will Landlord or Tenant win?

Answer:  Unless the Tenant is a huge anchor in the center, Landlord will usually win (because Landlord’s insurance underwriter will require Tenant to be liable for its own licensees and invitees, at least in situations involving accidents occurring within the demised premises itself).

What My Clients Are Saying

 “Chris is a business-minded attorney who negotiates with the client’s goals in mind.  He is a knowledgeable and constructive participant in deal negotiations… loyal to his clients but practical in his approach.”
Bond Payne, Jr. / Vice Chairman of Corporate Development, Argent Financial Group / Oklahoma City, Oklahoma

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Understanding Legal Terminology Used In the Uniform Commercial Code

Last Updated on Thursday, 8 March 2018 12:32 Written by Chris Griswold Thursday, 8 March 2018 12:32

The commercial transactional world is driven by certain, basic, legal terminology that appears in many contracts.  Understanding some of these better helps everyone.  In the world of commercial transactions (between commercial parties), there are actions and behaviors that have previously occurred either between the same or different sets of commercial parties (which are commercial buyers and sellers of goods – and all governed by the Uniform Commercial Code) that, over time, come to govern the future actions and conduct of such commercial parties, in the event of a dispute that later occurs between such parties.  Good stuff.  See more below (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Understanding Legal Terminology Used In the Uniform Commercial Code

Question #1:  What does “course of performance” mean? 

Answer:   In the event of a later dispute between two commercial parties, the court can look towards the past behavior of such, same two parties which has occurred over the course of time on the same deal.  For instance, if a buyer has been taking delivery of certain goods from the seller on a certain calendar date of the month for a long period of time, then, the failure of the seller to deliver on such date or the buyer to accept delivery on such date (whether or not the calendar date is set forth in the written contract, if any) shall be very persuasive in such later dispute.  In other words, the failure of either party to perform on such calendar date, after having performed on such date over a long period of time, disturbs the status quo of the relationship – a bad thing; the Court having jurisdiction over the dispute will view things through this lens.

Question #2:  What does “course of dealing” mean? 

Answer:  Same fact pattern as above, however, the Court can instead look at the past behavior of the same two parties which has occurred over the course of time on other deals (not the same deal).  In other words, the failure of either party to perform on such calendar date will be compared against how the parties have gotten along, for example, the twenty years before on other deals that they’ve done together.  Why the change?  Well, it might be because the matter at issue has never occurred on the same deal in question, but it has happened on other deals they’ve done together….

Question #3:  What does “usage of trade” and “industry standards” mean? Why would they be used? 

Answer:  Same fact pattern as above, however, in the absence of any deal history between the same two parties at issue which might serve as a guiding light in the matter at issue, the court will look at how other, similar parties behave under the same circumstances.  The way such other, similar parties behave can be discovered by: 1) looking at “usage of trade” (which is how certain business terms and dates are generally defined or handled by other, similar parties who conduct the same sort of trade together), and/or 2) by looking at the prevailing “industry standards” which are common and prevalent in the same industry at issue – that they can persuasively settle or resolve the matter at issue.  In such a situation, the Court uses these external customs, terms, practices or methods to resolve the matter at issue between such two commercial parties.

What My Clients Are Saying

“We needed some work done that, to us, seemed daunting.  Chris walked us through the entire process, without a bump in the road.  He made it easy.  Chris is the consummate professional.”
Russ Florence / President & COO, Schnake Turnbo Frank / Oklahoma City, Oklahoma

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Ice, Ice Baby (Vanilla Ice, To The Extreme, 1989)

Last Updated on Thursday, 11 January 2018 05:54 Written by Chris Griswold Thursday, 11 January 2018 05:54

Icy, snowy, slippery sidewalks (say it 3 times fast).  We’ve all seen our share this winter.  In response to a large number of inquiries I’ve received from concerned hotel, restaurant, office and retail owners and tenants, as well as the several requests I’ve received from our local insurance underwriting community that I write on the topic, I wanted to write a short piece in the hopes it saves some of you needless worry and, possibly, money.  Accordingly, I’ll answer the two most commonly asked questions from the groups mentioned above.  This should be helpful to everyone… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Ice, Ice Baby (Vanilla Ice, To The Extreme, 1989)

Question #1:  “If I put out snow melt on my sidewalks, does it somehow serve as an admission of guilt if someone should subsequently slip and fall on the premises?

Answer:  No.  The very act of putting out snow melt, etc… in an effort to prevent people from slipping, falling and hurting themselves cannot later be used against you.  In other words, you can’t use someone’s efforts to avert an accident against them later on if and when the accident occurs.  If you could, it would be tantamount to saying “…I’m suing you for trying to help me.”  Now, there are other relevant factors including, but not limited to, whether or not another person slipped and fell in the same area just before the plaintiff slipped and fell, whether you put out enough – and many others.  However, the fact that you put out snow melt, in and of itself, is not an admission of guilt; nor can it later be used against you in showing negligence.  Accordingly, don’t be afraid to put out snow melt when the weather gets bad.  However, and most importantly, when you put it out, put out enough to really do the job (including getting out your shovel if need be so the area(s) in question are clean, clear and safe).

Question #2:  “When should I put out snow melt?

Answer:  It depends.  Actually, the legally correct answer to this question is “when it’s reasonable to do so.”  Say what??!  I know…, it’s legalese and not really clear.  However, you can pretty much nail it down if you ask yourself the following question: Given the current weather conditions; if my mother came to see me at work today, should I put out snow melt?  If the answer is yes, put it out.  Otherwise, don’t sweat it.

What My Clients Are Saying

“Chris Griswold was instrumental in negotiating a very solid, long-term lease for our new bank branch in Oklahoma City.  His industry knowledge helped us avoid several potential pitfalls with a landlord that was somewhat difficult at times.  It was a pleasure to work with Chris because of his professional style and easy going demeanor.”  Charlie Crouse / Bank SNB / Oklahoma City, Oklahoma

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