Triad Properties, Inc., owns and manages a warehouse. Ikea, a home improvement s

Question

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

There are 2 possible situation in this case

Case1: after 2 years, if both parties agree and change contract terms stating utility bill as to be shared by both parties. Then traid is bound to pay. This is because at the time of modification, both the parties have agreed to sharing of utility bill. Traid cannot later retract from its commitment.

Case2: After 2 years, if both parties agree orally to share utility bill. This is not legally enforceable. Hence Triad can back out from sharing utility bill.

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