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Samanthas Case Study
Samantha, a 10th grade educated, stay-at-home mother who was forced to retire due her ill health, is facing a situation relating to the enforcement of provisions of a lease that she signed without reading. This case is an example of a scenario surrounding enforcement of the provisions of a lease between a landlord and a tenant. As evident in the case, the clauses or provisions in this lease grant the landlord the right to amend the agreement at will. In essence, the lease is structured in a manner that seemingly favors the landlord over his/her tenants. Garson (2006) states that lease agreements between landlords and tenants sometime contain unenforceable clauses or provisions that work in favor of one partly, especially the landlord. In this scenario, the lease is designed in a manner that gives Samanthas landlord some unenforceable rights.
Samantha can use the concept of severability to invalidate some of the provisions of the lease agreement with the landlord. This concept is used to invalidate some provisions (parts) of a contract between parties that are deemed unenforceable or illegal while the rest of the agreement remains applicable. In Samanthas situation, she can invalidate Clause 2 of the lease agreement between her and the landlord. This clause grants the landlord the right to amend or alter the...…invalidating this provision are very high. The argument that what constitutes acceptance of the conditions of the amendments, which resulted in breach of the lease, would imply that the clause was unenforceable. Even though this provision is not necessarily illegal, the failure to provide clear timelines for acceptance of amendments would imply that it cannot be enforced. If Clause 2 is deemed unenforceable, the landlords decision to force Samantha to leave would be null and void. This would imply that Samantha would not be held liable for breach of the lease and for other damages that emerged as a result of her breach of lease. Therefore, Samantha would not need to pay the…
Reference
Garson, J. (2006, November). In the Spotlight: Unenforceable Lease Provisions. Retrieved April 30, 2018, from http://garsonlaw.com/in-the-spotlight-unforceable-lease-provisions/
Capital Leases, n.d.). These two have significant impacts on the balance sheet and income statement of the firm. In the balance sheet, the operating lease has no effect while the capital lease shows interest receivable and capital asset with depreciation on the asset side and debt on the liability. In the income statement, both the operating lease and capital lease records an operating expense; the latter also shows interest as
A financial component that should be considered here is the capital available to the investor. If the business is not very stable, and capital could become a problem, leasing is probably a better option, as the term is shorter. During the shorter term, security can be built, and purchase options can then be considered when the capital is available. For a very stable business with large amounts of capital
Lease vs. Buy Differences Buy or Lease -- Buying involves simply purchasing a particular item, generally by financing it if the item is expensive (Pine Grove, 2005). Leasing involves a contract process similar to renting, where the person that leases the item will decide at the end of the lease term whether to purchase the item that was leased (Pine Grove, 2005). Advantages to Both Options -- The advantages to buying include
In truth, it would be preferable on the part of the landlord not to allow assignments or sublets of any type, but it is likely that the tenant will want this option in order to allow them greater flexibility should their need for space prove to be less than estimated and again, due to the amount of space available on the market in China it is largely a buyer's
lease a financing vehicle? How leases accounted firm's financial reports? What difference a capital lease Leasing Alternatives Essentially, leases are alternative means of gaining access to products or goods that could otherwise be purchased outright. There is a certain degree of irony in this definition, primarily due to the fact that there are forms of leases which are extremely similar to purchases, although they contain key distinctions that still make it
Lease accounting. There an exposure draft issued FASB leases. Go FASB website download a copy exposurte draft. Prepare analysis paper approximately 5 pages double spaced. 1. Lease accounting As the business community evolves and becomes faced with more and more challenges, the economic agents are forced to develop alongside. They as such devise and implement a wide array of business strategies aimed at increasing their operational efficiency, their financial strength and