Sudson Washer and Dryer
Service is in the business of leasing used washers and dryers to apartment
landlords for a contracted lease term. The coin-operated machines are used by
apartment tenants. Letisha, 25, a human resource clerk, owns a five-unit apartment
complex. While she resides in one of the units, the others are occupied by
tenants. Sudson contacts Letisha and offers to lease one washer and one dryer.
The washer and dryer in
Letisha’s apartment complex are old and worn-out. Anxious to keep her tenants
happy, Letisha meets with Sudson’s salesman who presents her with a one-page
agreement for the use of one washer and dryer for five years. The five-year
term is standard and the front page of the contract states the lease period.
Letisha (as lessee) and the salesman for Sudson (as lessor) sign the front page
of the contract and Letisha retains a copy of the signed agreement.
The salesman did not inform
Letisha of, nor did she bother to read the back of the agreement which
contained additional terms, one of which is an ”automatic renewal” clause that
states: “If the lessee fails to provide a 90-day written notice to terminate
the contract by certified mail to the lessor, the five-year lease term period
shall automatically renew for three additional five-year terms and shall only
be subject to termination by the lessor.”
Letisha uses the machines for
the five-year period and just a few weeks prior to the end of the term, calls
Sudson to provide them with a courtesy notice saying she is not going to renew
her agreement. The operator replies that since she failed to provide the 90-day
written, certified notice of termination, the lease will be renewed for three
five-year terms or another 15 years.
Letisha says that she never
saw that clause. The operator replies that it was her obligation to read
the back page of the agreement and Sudson will require her to make monthly
payments for the next 15 years. Letisha does not know what recourse she
now has.
Research the Internet whether
Letisha has a contract formation or enforcement defense based on the legal and
ethical use of automatic renewal clauses in lease agreements. Based on the
facts of the case and research, write an analytical paper. In the paper,
respond to the following questions:
·
If Letisha does not pay and
Sudson sues her for breach of contract, what legal arguments could be raised in
Letisha’s defense against the enforcement of the automatic renewal clause?
Explain.
·
What legal arguments could be
raised by Sudson in support of the enforcement of the automatic renewal clause
against Letisha? Explain.
·
What ethical issues are
raised, if any, by Sudson’s practice of using the automatic renewal clause in
their lease agreements? Explain.
·
Does the Uniform Commercial
Code Article 2A apply in this case? Explain.
·
Are there any government or
private entities available to Letisha for lodging complaints about businesses
which treat consumers unfairly? Explain.
·
If Sudson sues Letisha for
breaching the contract’s automatic renewal clause, what do you think the outcome
of the case will be? Explain.
Write
a five-page paper in Word format. Apply APA standards for writing style to your
work.
