A contract between a business and a property owner for the rental of property is known as a commercial lease. Since it requires less capital to rent property as compared to buying, many businesses prefer the former. It is crucial for a party to understand the terms and conditions of a commercial lease agreement before getting into a contract with the property owner as every lease is different from the other depending on the negotiating power, responsibilities, and rights of the parties involved (Currier & Eimermann, 2016).

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Article 2A of the Uniform Commercial Code governs the leases of goods. In 1987, this article was added to the Uniform Commercial Code and amended in 1990 (Legal Information Institute, 2004). The article gives the right to use and possession of goods to a lessee for a given period in exchange for rent. Some of the terms described in article 2A of the Uniform Commercial Code include warranties against interference, liquidated damages, and electronic transaction. About warranties against interference, the article states that the lessee’s enjoyment should not be interfered with by any claim against the property owner or the lessor (Legal Information Institute, 2004). On the liquidated damages, the article states that liquidated damages or damages’ limitations may be stated in any lease agreement or contract. About the electronic transactions, the article states that records and signs may be in the form of electronic signatures and electronically signed documents, which are electronic transactions (Legal Information Institute, 2004).

According to Reuters (2018), there are three areas of concern within commercial lease agreements. These areas of concern are fewer legal protections, varied terms, and negotiable terms. There is less consumer protection by State Laws as the States assume that customers are knowledgeable of matters of lease agreements and therefore property owners may indulge in deceitful practices (Reuters, 2018). Commercial lease agreements offer varied terms as different customers have different requirements and property owners have to accommodate all the requirements. Negotiable terms in lease agreements arise due to different factors such as allowable improvements, rent increases, rent amount, and the length of a lease.

  • Currier, K.A., & Eimermann, T.E. (2016). The study of law: A critical thinking approach (4th ed.). New York, NY: Wolters Kluwer.
  • Legal Information Institute. (2004). Uniform commercial code: Article 2a. Retrieved from http://www.nyulawglobal.org
  • Reuters, T. (2018). Commercial Lease Agreement Overview – FindLaw. Retrieved from https://smallbusiness.findlaw.com