Joseph Martin, Jr. Delicatessen v. Schumacher
436 M.Y.S.2d 247, 417 N.E.2d 541 (N.Y. 1981)
- Schumacher leased property to Martin for his store. The lease was for $500 a month for the first year, and then a bit more each year until $650 the last year.
- The contract stated that Martin could renew the lease for an additional 5 years at annual rentals to be agreed upon.
- When 5 years was up, Schumacher demanded $900 a month to renew the lease, even though the fair market value was assessed at only $545. Martin refused to pay $900 and sued to make Schumacher rent him the property at a more reasonable rate.
- In this case, Martin didn’t want monetary damages, he wanted specific performance as a remedy.
- Schumacher got a court order to have Martin evicted.
- The Trial Court found that the contract for future rental was unenforceable as a matter of law, because of uncertainty.
- Martin consolidated the eviction matter with the contract matter and appealed.
- The Appellate Court reversed.
- The Appellate Court said that it would not be unreasonable to hire an appraiser and calculate a reasonable rent.
- The New York Supreme Court reversed the Appellate and reinstated the Trial Court’s decision.
- The New York Supreme Court found that the contract was poorly written in that it provided no information on how future rents were to be calculated, or what the process would be if there was disagreement.
- Courts have historically declined to enforce agreements to agree.
- Courts have left the consideration in contracts to the parties to the contract. If the Court enforced this contract, they would have to define the consideration, and they never do that.
- Btw, UCC §2-305 does not follow the common law rule of not enforcing agreement to agree. (But remember that this case was not governed by the UCC since it wasn’t an offer to sell goods).