Asked by Megan Smith on Jun 05, 2024
Verified
The recovery for a lessee's wrongful repudiation of a lease is the difference between the present values of the old rent due under the original lease and the market rent.
Wrongful Repudiation
The unjustified refusal to fulfill the terms of a contract, thereby breaching the agreement.
Present Values
A financial calculation that determines the current worth of a future sum of money or stream of cash flows, given a specified rate of return.
Market Rent
The prevailing rental rate for properties, typically of similar type and location, determined by the current market conditions.
- Understand the fallout and remedial actions possible when a breach occurs in a sales agreement by either a buyer or seller.
Verified Answer
CS
Christina ShepardJun 06, 2024
Final Answer :
True
Explanation :
The recovery for a lessee's wrongful repudiation of a lease typically involves the lessor being compensated for the loss, which is calculated as the difference between the present values of the rent due under the original lease and the current market rent for the remainder of the lease term. This calculation aims to put the lessor in a position as close as possible to where they would have been had the lease not been repudiated.
Learning Objectives
- Understand the fallout and remedial actions possible when a breach occurs in a sales agreement by either a buyer or seller.