No. 01-09-00187-CV
Facts
Merry Homes leased premises to Chi Hung Luu. Luu wanted to open a night club. The lease provided several terms and conditions for use of the land including inter alia observing all federal, state, and local law. Luu was denied a license to open a bar as selling alcohol close to three hundred feet from a school was contrary to local law. Opening up a restaurant would have been more expensive. Merry Homes refused to cancel the lease and return the $ 60,000 paid as consideration. Luu sought a declaratory judgment to have the lease declared void. The trial court agreed. Merry Homes appealed.
Issue
Whether or not there was a mutual mistake between Luu and Merry Homes with regards to the position of the law
The Law
A lease is a contract. Any contract must be executed and performed within the confines of the law. Any contract that is impossible to perform due to actions that are beyond the control of any of the parties and cannot be attributed directly to the fault of any of the parties is void.
Analysis
When parties enter into contractual agreements of any nature including leases, they do so with the presumption that all parties shall perform all parts of their bargain. A party who fails to perform his or her end of the deal is sanctioned by law. The subject matter of the contract must also be implementable within the law, as the law would not support an illegal venture. Merry Homes should or was in a position to know that it would be contrary to the law to lease the premises for the purposes of opening a liquor store some three hundred feet close to a school. The minute they realized this, they should have rescinded the lease. Ignorance of the law cannot be upheld as a defence.
Conclusion
The appellate court upheld the trial court ruling. The lease was void and the consideration Luu had paid must be returned.
Work Cited
Cross, Frank B and Roger LeRony Miller. The Legal Environment of Business: Text and Cases: Ethical. New York: Cengage Learning, 2010.
