Martin Deli v. Schumacher

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Martin Deli v. Schumacher
Court New York Court of Appeals
Citation 417 N.E.2d 541
Date decided January 20, 1981

Facts

Original lease had a provisions that after five years, the lease could be renewed with a rent amount to be agreed upon. Five years into the lease, the parties could not agree upon a new rent amount.

  • Mr. Schumacher = "Schumacher" = defendant = a landlord = he agreed to lease a retail store
  • Martin, Jr., Delicatessen, Inc. = "Martin" = deli businessman = plaintiff = lessee
  • In 1973, Martin leased a retail space from Schumacher for 5 years.
  • The rent would increase from $500/month in the 1st to $650/month in the 5th year.
  • After leasing the place for 5 years, Schumacher nearly doubled Martin's rent to $900/month.

Procedural History

Martin sued for specific performance asking the court to compel Schumacher to lease at the fair market value for the rent.

Schumacher won a summary judgement in the trial court.

However, Schumacher lost in the Appellate Division of New York.

Issues

Is a provision in a lease that the rent for a renewed lease is to be agreed upon at the time of renewal enforceable?


Issue: Are both parties required to come to the bargaining table and agree upon a new rent amount?

Holding

No. A provision in a lease that the rent for a renewal period is to be agreed upon at the time of renewal is un-enforceable due to uncertainty.

Final holding was in favor of Schumacher.


Holding: No, there is no such enforceable clause.

Judgment

Reversed the Appellate Division

Reasons

Judge Fuchsberg: An agreement that leaves open a material term [the new monthly lease amount after 5 years] for future negotiation is un-enforceable.

Rule

Rule: An "agreement to agree" is not enforceable.

Resources

Joseph Martin, Jr. Delicatessen v. Schumacher, 52 N.Y.2d 105, 436 N.Y.S.2d 247, 417 N.E.2d 541. (N.Y. App. Ct. 1981).