Question 1 25 pts Triad Properties, Inc., owns and manages a warehouse. Ikea, a

Question

Question 1 25 pts Triad Properties, Inc., owns and manages a warehouse. Ikea, a home improvement store, agrees to lease the warehouse for six years. Under the lease, Ikea is obligated to pay all of the utility costs. Two years into the term, Ikea asks Triad to modify the lease to provide that the utility costs will be split equally between them. The landlord agrees, but later decides it does not want to share the costs and refuses to pay. Is Triad bound to its agreement to share the utility costs? Why or why not?

Explanation / Answer

In this situation, since under the initial lease terms, Ikea is obligated to pay for all of the utility costs, Ikea is bound to pay the utility costs for first two years. After two years, if a new agreement has been forged between the parties to split the utility costs equally, then both the parties are liable to pay the utility costs according to their share. Hence, Triad is bound to share the utility cost and to abide by the new agreement (if made), else Triad is not liable to pay for the utility costs if there was a verbal commitment and no legal agreement in force.

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