Break Clauses

1. The Nature of a Break Clause
A Definition
A Break Notice is not a Notice to Quit
The Right to Terminate is Unilateral
Forfeiture and Acceptance of Repudiatory Breach Distinguished
A Break Clause is a Type of Option
The Applicability of Braganza Restrictions on the Exercise of a Break Clause
Break Clauses can Appear in All Types of Tenancies and in Many Different Forms

2. Formalities and Registration
Formalities
Registration

3. Assignment
The Historical Position
Tenancies Granted before 1 January 1996
Tenancies Granted on or after 1 January 1996
Formalities for Assignment
Restrictions on Assignability
Severance of the Reversion
Assignment of Part of the Demise
The Position of Equitable Assignees
The Position where the Break Clause is not Contained in a Lease

4. Who May Exercise the Break Clause
Introduction
Where the Lease is Silent or Unclear
Joint Lessees
Joint Lessors
The Survivor(s) of Joint Lessors/Lessees
Where the Landlord is also One of the Tenants
Concurrent Lessees
The Position with Leases Taking Effect in Equity
Equitable Assignees of the Term or Reversion
Upon Reassignment of a Lease Containing a Personal Break Clause
Former or Non-landlords/Tenants
Agents
Partnerships
Insolvency
Receivers and Managers
Personal Representatives

5. The Form and Content of the Break Notice
Introduction
Compliance with Indispensable Conditions
Mistakes in the Break Notice: The General Approach
The Objective Approach to the Construction of Notices
The 'Relevant Objective Contextual Scene'
Mistakes as to the Break Date
Mistakes as to the Identity of the Serving Party
Mistakes as to the Identity of the Intended Recipient
Mistakes as to the Identity of the Demised Premises
Break Notices Marked 'Without Prejudice'
Break Notices Marked 'Subject to Contract'

6. The Time for Exercise of the Break Clause and Service of the Break Notice
Introduction
References to the 'Commencement of the Term'
The Time for Exercise of the Break Clause
The Specified Period of Notice
The 'Corresponding Date' Rule
Other Fractions of Time
The Effect of Late Service
Acceptance of Short Service of a Break Notice

7. The Method of Service of a Break Notice
Introduction
Compliance with the Prescribed Contractual Method for Service
Particular Contractual Methods for Service
'Indirect' Service
Section 196 of the Law of Property Act 1925
Section 7 of the Interpretation Act 1978
Service at Common Law

8. On Whom the Break Notice Should be Served
Introduction
Joint Lessees/Lessors
Multiple Parties
Concurrent Lessees
The Position with Leases Taking Effect in Equity
Equitable Assignees of the Term or Reversion
Former Landlords/Tenants
Agents
Partnerships
Insolvency
Receivers and Managers
Where the Intended Recipient has Deceased
Personal Representatives

9. Conditions in a Break Clause: General Principles
Introduction
Identification of the Conditions
The Principle of Strict Compliance
De Minimis Failures to Comply with Conditions
The Time for Compliance
Spent Breaches
Words of Qualification
Settlements/Side Agreements
Service of a Break Notice without Fulfilling Conditions

10. Particular Conditions in a Tenant's Break Clause
Introduction
Vacant Possession
Payment of Rent and Other Sums
Repairing Obligations
Reinstatement Obligations

11. The Recovery of 'Overpaid' Rent and Other Sums
Introduction
Implication of a Term in the Lease
Implied Agreement
Restitution for Unjust Enrichment

12. Redevelopment Break Clauses
Conditions in a Landlord's Break Clause
Intention, Desire and Other Linguistic Formulations
The Scope of the Break Clause
Redevelopment Break Clauses under the 1954 Act
Redevelopment Break Clauses under the 1993 Act
The Electronic Communications Code

13. Invalid Break Notices: Waiver, Estoppel and Withdrawal
Introduction
Waiver and Estoppel: General Principles
The Operation of Waiver and Estoppel in the Break Clause Context
Unilateral Waiver in Respect of Performance of Conditions
The Server of a Notice Cannot Rely upon his Own Wrong
Silence
Withdrawal of a Break Notice
Countermanding a Break Notice
Sequential Break Notices

14. The Effect of Exercising a Break Clause
As between Landlord and Tenant
As Regards an Underlessee
15. Break Clauses and Compulsory Purchase
Introduction
Compensation: General Principles
Compensation for an Interest Subject to a Break Clause

16. Break Clauses and Rent Review
Introduction
Procedural Relevance
Substantive Relevance

17. Professional Liability
Introduction
Failure to Advise During a Transaction
Failure to Remind of an Approaching Break Date
Failure to Draw Attention to Preconditions
Failure to Give Proper Notice
Contributory Negligence

18. Business Tenancies
Introduction
Termination of Business Tenancies by the Landlord
Termination of Business Tenancies by the Tenant
The Position of Sub-tenants
The Extent of the 'Broken' Demise
The Insertion of Break Clauses into New Leases under the 1954 Act

19. Residential Tenancies
Introduction
Termination of Rent Act Tenancies
Termination of Assured Tenancies
Termination of Assured Shorthold Tenancies
Termination of Contractual Tenancies without Any Security of Tenure

20. Agricultural Tenancies
Introduction
Termination of Tenancies of Agricultural Holdings
Termination of Farm Business Tenancies
Allotments

21. Drafting Break Clauses
General Remarks
Matters to be Addressed when Drafting a Break Clause

22. Practical Advice when Exercising a Break Clause
Advice for the Party Seeking to Exercise the Break Clause
Advice for the Recipient of a Break Notice
Litigation Tactics for the Tenant
Litigation Tactics for the Landlord