<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by slamdunk:
I started a home based business 2 years ago. With it I signed a 72 month lease for a merchant account that enabled me to charge purchases, with my pc, to the customers credit card. I have since gone out of business. Is there any way I can get out of the lease since the business is no longer viable?<HR></BLOCKQUOTE>
My response:
LEASE BREAKING
On occasion, lessees may find that they are unable to keep up on the payments of a lease until the end of the lease term. In the event of this occurrence, or other unforseen circumstances, there are several factors to consider. If subleasing is not an option, a lessee might consider the prospect of breaking a lease. Signing a lease obliges you to pay rent for the full lease term whether or not you use the benefits of the lease. However, a lessor must take all reasonable steps to keep damages to a minimum (mitigate damages, according to California law). If you break your lease, the lessor has the responsibility to again lease the benefits of the lease at the best price possible. The amount of money, if any, that the lessor can recover from the original lessee is the difference between what the lessee was obliged to pay the lessor under the terms of the lease and what the lessor can get by leasing the benefits of the lease to someone else for the same period of time. If there is a high demand for your type of lease, the lessor should be able to get a new lessee fairly quickly. As a result, the lessee who breaks a lease may be obliged for little or no damages.
If you gave the lessor written notice that you will be ending payments on the lease before the end of the lease term, you are protecting yourself by giving the lessor ample time to find another lessee. However, in doing this you have theoretically broken your lease contract and the lessor could sue you for "anticipatory breach of contract." In some cases the lessor may settle for an amount of money to compensate him or her for the trouble in finding a new lessee. If the amount is small it may be easier to agree to pay rather than to become involved in a dispute. If your lessor has a security deposit, you might offer to let him keep all or part of this in full settlement of all possible damage claims arising from your failure to continue paying on the lease in the middle of the lease term. In either case, be sure and get a signed statement that the lessor is agreeing to cancel the lease in consideration of that amount. Again, the lessor has a duty to re-lease the benefits of the lease, and since this is reasonably easy to do, you should not agree to pay much in the way of damages. If your lessor refuses to deal with you reasonably, do not let him intimidate you. Put an advertisement in a local paper and list the benefits of the lease and that you will accept a negotiable discount on the remaining amounts due on the lease, with you picking up the reduced balance. Give the names of all interested parties to your lessor directly. Keep a list of all prospective lessees who appear to be suitable and are interested in taking over the lease. It is advisable to contact the your attorney for further specifics before proceeding to break a lease. Be sure to bring a copy of your lease with you. Also, one last note: Like any other contract, if the lessor doesn't obtain the full value of the lease through no fault of his/her own, and after attempting mitigation, your credit could suffer with a negative entry; so, do all you can to assist your lessor to get a replacement lessee or that you, and someone else, makes up the total monthly payments so that your lessor gets the full bargain of his/her deal with you.
IAAL
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