May Centers, Inc. V. Paris Croissant of Enfield Square, Inc.

42 Conn. Supp. 77, 599 A.2d 407 (1991)

Facts: On Feb 4, 1986, Paris entered into a ten year commercial lease with May Centers. The lease provided for a minimum rent, to be paid in advance on the first day of each calendar month, the first month’s minimum rent to be paid at the time of execution of the lease. According to the lease, if Paris was over ten days late in payment, May Centers could reenter the premises and sublet them, or declare the lease at an end, evict Paris and collect the rent due over the balance of the term. Also included was 12% interest on the unpaid balance and attorney’s feeds incurred collecting the debt. Paris executed a guaranty deed drafted by May Centers. The guaranty deed promised that Paris would absolutely, unconditionally, and irrevocably guarantee to May Centers to be liable for full payment of rent and charges under the lease. It also provided that if Paris defaults on payment, the guarantee will remain for the entire term of the lease. The lease commenced on April1 15, 1986. Accordingly, Paris made payments around the middle of the month for two. In July, 1988, Paris failed to make payments, and May Center sent default notices, for a period of four months. In May of 1989, Paris ceased paying the rent and forfeited their key May Center. May Center brought suit claiming unpaid rent costs, interest, and attorney’s fees totaling about $55K. The court granted the first count of $55K, but denied the second count as guarantors.

Issue/Reasoning: The issue in the second count was whether there was a condition precedent that generated an extension of the guaranty beyond the initial two years.

May argued that the payments were made late every month, therefore defaulting them and extending the guarantee over the ten years.

The court mentioned that course of conduct can be inspected to find the intent of the parties for the purpose of interpreting ambiguous language in a contract, and subsequent modifications of a contract or an abrogation of specific contract terms. Proof of a modification to the contract is established by a showing of mutual assent, which in turn may be inferred from the attendant circumstances and conduct of the parties.

The court concluded that since the payments were accepted without complaint, the parties indicated by their conduct their mutual consent to substitute the fifteenth as the due date for the rent. And since the lease provided a ten day grace period, the payments that were made late in the months were legitimate. Since May accepted the final payment (for the two year guarantee), the consequence of the late payment, if any, was cured.

Rule: Proof of a modification to the contract is established by a showing of mutual assent, which in turn may be inferred from the attendant circumstances and conduct of the parties.