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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Can you call a lease with rent undetermined at the start of

Customer Question

Can you call a lease with rent undetermined at the start of the lease? I have an option agreement to lease land with the rent based on installed capacity for electricity generation. At the time of calling the lease no planning permission had been granted for electricity generation. The land owners solicitors says the lease is invalid as no installed capacity was the present when the lease was called.
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts : Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return.
Alex Watts : Usually a lease has a term in the agreement itself saying what the rent is.
Alex Watts : In order for a contract to be binding it must have consideration, ie money.
Alex Watts : In this case there is no consideration as it is not stated and indeed undetermined and therefore not certain.
Alex Watts : In those circumstances there can be no good consideration and that would mean the element of the contract does not exist.
Alex Watts : If there is no element of the contract then the contract is defective.
Alex Watts : If there the contract is defective it is indeed invalid.
Alex Watts : I am sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest.
Alex Watts : Can I clarify anything for you about this today please?
JACUSTOMER-1tou3q8q- :

The lease rental states that the payment is to be calculated on the installed capacity of the generation. The lease is required to allow us to install the capacity for generation. This rental arrangement is akin to turnover based rent lease agreements, where rent is paid on the turnover generated at the premises, you need the lease to "rent " the unit but no turnover is guaranteed.

Alex Watts : So it's profit share? When you say generation you mean for solar?