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TYGlobe Insight | Legal Application of Liability for Breach of Contract during the Term of Unscheduled Lease Contracts

Case Introduction: In September 2020, Lessor Company A leased its street-front commercial premises to Lessee Company B. The two parties entered into a Housing Lease Contract, which stipulated the liability for breach of contract to be borne by Company B in case of overdue rent payment. Subsequently, as the epidemic caused heavy operational losses to the commercial premises, Company B was unable to pay the rent. Taking the epidemic factor into consideration, Company A agreed that Company B could temporarily defer the rent payment. However, after the end of the epidemic, Company B claimed that there were management defects on the part of Company A and still failed to pay the rent. After the original lease contract expired, the two parties did not formally terminate the lease relationship, and Company B continued to use the commercial premises owned by Company A, thus forming a non-fixed-term lease contract relationship between the two parties. Nevertheless, Company B still refused to pay the rent at this point. Accordingly, Company A issued a notice of contract termination to Company B on the grounds of Company B's breach of contract, and a litigation arose therefrom.

2024-03-06