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       #Post#: 39--------------------------------------------------
       Kendall v. Ernest Pestana, Inc.
       By: SunsetSailor Date: January 27, 2011, 10:27 pm
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       RULES:
       * MAJORITY RULE:
       1. Where a lease contains an approval clause (a clause
       stating that the lease cannot be assigned without the prior
       consent of the lessor), the lessor may arbitrarily refuse to
       approve a proposed assignee no matter how suitable the assignee
       appears to be and no matter how unreasonable the lessor’s
       objection (396)
       * MINORITY RULE:
       1. Where a lease provides for assignment only with the
       prior consent of the lessor, such consent may be withheld only
       where the lessor has a commercially reasonable objection to the
       assignment, even in the absence of a provision in the lease
       stating that consent to assignment will not be unreasonably
       withheld (396)
       2. Under the minority rule, the determination whether a
       lessor’s refusal to consent was reasonable is a question of
       fact.  Some of the factors that the trier of fact may properly
       consider in applying the standards of good faith and commercial
       reasonableness are: financial responsibility of the proposed
       assignee; suitability of the use for the particular property;
       legality of the proposed use; need for alteration of the
       premises; and nature of the occupancy (398)
       * R2d PROPERTY:
       1. A restraint on alienation without the consent of the
       landlord of a tenant’s interest in the leased property is valid,
       but the landlord’s consent to an alienation by the tenant cannot
       be withheld unreasonably, unless a freely negotiated provision
       in the lease gives the landlord an absolute right to withhold
       consent. (397)
       * COURT’S RULE: (Adopts MINORITY’S Position)
       1. Both the policy against restraints on alienation and
       the implied contractual duty of good faith and fair dealing
       militate in favor of adoption of the rule that where a
       commercial lease provides for assignment only with the prior
       consent of the lessor, such consent may be withheld only where
       the lessor has a commercially reasonable objection to the
       assignee or the proposed use (400)
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