A commercial landlord sued a prospective tenant for damages arising from the tenant’s refusal to proceed with a lease after an offer to lease had been executed and a draft lease negotiated.
During design work, the parties discovered that a structural bearing wall prevented installation of the large windows contemplated by the offer, and that installing them would cost more than ten times the estimated amount.
The court held that the subsequent draft lease was unenforceable under the Statute of Frauds because it was never signed and no written memorandum satisfied the statute.
The court further found that the original offer to lease was frustrated by an unforeseeable structural condition that fundamentally altered the nature of the bargain, as the building could not reasonably provide the natural light and design features essential to the tenant’s intended use without radically increased cost.
Both the action and the tenant’s counterclaim were dismissed.
