united-kingdom rental-property tenant fair-housing-acts tenancy-rules
Interpretation of termination clause of a License to Occupy
<p>I find myself in a situation where I need to end my Licence to occupy contract for a property in London UK, 2 months in advance to the initially projected date. The licensor refuses to accept this and the terms in the contract are somewhat open to interpretation/speculation, in my opinion. Here is an exact excerpt from it:</p>

<blockquote>
  <p><strong>Termination</strong></p>
  
  <p>This Licence shall end on the earliest of:</p>
  
  <p>9.1. 31 May 2020; and</p>
  
  <p>a) the expiry of a two weeks' notice given by the Licensor to the
  Licensee at any time of breach of any of the Licensee's obligations
  contained in clause 3; and</p>
  
  <p>b) the expiry of not less than 1 months' prior written notice given by
  the Licensee to the Licensor: if the Licensee does not to give notice
  to the Licensor the Licence will continue under the terms herewith in.
  To be clear: to end the Licence the Licensee MUST give one months'
  prior notice for the Licence end date or the Licence will NOT END and
  the Licensee will be responsible for the rent until the Licence is
  ended by either party as detailed herewith in.</p>
  
  <p>c) The Licensee may not serve notice to determine (end) in the months
  of July, December or prior to the 15th of January.</p>
</blockquote>

<p>Does point 9.1.b) basically say that I can leave whenever (except in those cases mentioned at 9.1.c) ) as long as I notify them 30 days in advance?</p>

<p>If that is indeed the case, how do i make the landlord understand that they’ve got the wrong interpretation or how do i proceed in pursuing cancellation?</p>

<p>There are no other terms modifying the termination date in the contract, to the best of my knowledge.</p>

<blockquote>
  <p>Does point 9.1.b) basically say that I can leave whenever (except in those cases mentioned at 9.1.c) ) as long as I notify them 30 days in advance?</p>
</blockquote>

<p>Yes. The clause conclusively entitles you as occupant to terminate the license prior to May 2020 (subject to 9.1b and .c).</p>

<p>The interpretation that the "31 May 2020" term is <em>in addition</em> to the requirement of a party's notice makes no sense, as it would lead to absurd outcomes.</p>

<p>For instance, consider the scenario where the occupant blatantly and continuously breaches each and every term of "clause 3" well in advance of May 2020 (say, since the day after the contract or licence became effective). According to the landlord's [mis-]interpretation, he would have to tolerate the ongoing losses up to the end of May 2020. That would hinder the landlord's duty to mitigate losses despite being <a href="https://www.darlingtons.com/blog/breach-of-contract-the-innocent-partys-duty-to-mitigate-loss" rel="nofollow noreferrer">required under English law</a> to do so. Thus, the landlord would be in the dilemma of either (a) to comply with [his interpretation of] the terms of clause 9.1 and allow losses to worsen, or (b) mitigate those losses by prematurely terminating the license and consequently put himself in breach of contract.</p>

<p>Simply put, it makes no sense for a contract to impede the parties' duty to mitigate losses: It is unenforceable to the extent that it contravenes contract law. Nor does it seem reasonable to prohibit termination of a contract where the intent thereof clearly is frustrated.</p>

<p>The landlord's interpretation is absurd also from the standpoint that it would render 9.1c nugatory (and, at best, ritualistic).</p>

<p>Clause 9.1.c essentially excludes certain points in time for termination countdown/clock to start: July, December, or prior to the 15th of January. If termination shall never be effective prior to May 2020, then clause 9.1.c serves no purpose (except maybe for notices dated close to the 31st of May). The mere existence of 9.1.c is indicative that the parties' intent was to permit termination to be effective at dates prior to 31 May 2020.</p>

<p>Lastly, the landlord's rationale is not detailed in your question but it appears that <em>he</em> drafted the "ambiguous" clause. In that case, the <a href="https://en.wikipedia.org/wiki/Contra_proferentem" rel="nofollow noreferrer">doctrine of <em>contra proferentem</em></a> would favor your position if the clause were indeed ambiguous.</p>

<h2>You could be right</h2>

<p><strong>Of course, so could they</strong></p>

<p>This is a really good example of a really poorly drafted clause. It could mean what you think it means, it could also mean that the 31 May 2020 is the earliest date for termination <em>and</em> one of the other subclauses must be followed. </p>

<p>You can't "make the landlord understand"; you can only explain your interpretation and listen to them explaining theirs. One of you might realise the other is right or you might reach a compromise agreement.</p>

<p>Failing that, if you are sure you are right, you can give the notice under 9.1(b) and defend your position in court when the landlord sues you. The court will work out which one of you is right.</p>
