Lock-in-period in a lease deed
4 months ago
In a lease agreement there is a clause of lock-in-period, which states that the Lessee is bound to pay the Lessor the balance rent for the unexpired period of the lock-in term, in case of any early exit by the Lessee or termination. Is this enforceable in a court of law? If not what are the remedies available to the Lessor?
A.Dear Sir,
If it is not registered such terms are not executable and enforceable. You may get issue a legal notice and exist and vacate the premises.
If it is not registered such terms are not executable and enforceable. You may get issue a legal notice and exist and vacate the premises.
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A.Dear Client,
A general notion is that agreements simply cannot be terminated before the lock-in period is complete. There are various reasons upon which an agreement can be rightly terminated within the lock-in period. Not only that, one can always terminate a contract within the lock-in period, given the fact that the terminating party will have to abide by the terms of lock-in as specified in the agreement. Situations in which the Agreement can be rightly terminated within the lock-in period: 1. Breach of terms of Agreement, i.e. non-compliance or non-performance 2. Contract becoming void in itself. 3. Applicability of Force Majeure to lock-in period, The Indian judiciary has clearly held in several cases that such a claim is not valid. The aggrieved party is only entitled to get compensation/ damages valued by the court itself depending on the actual loss that the party has suffered due to such breach. Remedies in case of breach of a lock-in clause are the same to those of the remedies for any other contractual breach i.e., damages and specific performance of the contract. Damages to be paid in breach of the contract are generally quantified in the agreement itself. Nevertheless, in each case, it is for the court to decide the reasonability of the damages claimed based on evidence advanced during the trial. Only reasonable damages are to be awarded by a court for a breach of any contract irrespective of whatever damages amount had been expressly consented upon by both the parties in the agreement.
A general notion is that agreements simply cannot be terminated before the lock-in period is complete. There are various reasons upon which an agreement can be rightly terminated within the lock-in period. Not only that, one can always terminate a contract within the lock-in period, given the fact that the terminating party will have to abide by the terms of lock-in as specified in the agreement. Situations in which the Agreement can be rightly terminated within the lock-in period: 1. Breach of terms of Agreement, i.e. non-compliance or non-performance 2. Contract becoming void in itself. 3. Applicability of Force Majeure to lock-in period, The Indian judiciary has clearly held in several cases that such a claim is not valid. The aggrieved party is only entitled to get compensation/ damages valued by the court itself depending on the actual loss that the party has suffered due to such breach. Remedies in case of breach of a lock-in clause are the same to those of the remedies for any other contractual breach i.e., damages and specific performance of the contract. Damages to be paid in breach of the contract are generally quantified in the agreement itself. Nevertheless, in each case, it is for the court to decide the reasonability of the damages claimed based on evidence advanced during the trial. Only reasonable damages are to be awarded by a court for a breach of any contract irrespective of whatever damages amount had been expressly consented upon by both the parties in the agreement.
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A.Dear Client,
The lock-in period clause is valid and enforceable by law, as you have agreed to the terms of the lease agreement which specifies the lock-in period you will be liable to pay the rest of the rent if you leave before the lock-in period.
Thank You.
The lock-in period clause is valid and enforceable by law, as you have agreed to the terms of the lease agreement which specifies the lock-in period you will be liable to pay the rest of the rent if you leave before the lock-in period.
Thank You.
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