Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

تمرين 21

FACTS In 1977, the defendant, Kelly-Moore Paint Company, entered into a fifteen-year commercial lease with the plaintiff, Osprey, for a property in Edmond, Oklahoma. The lease contained two five-year renewal options. The lease required that the lessee give notice of its intent to renew at least six months prior to its expiration. It also provided that the renewal ''may be delivered either personally or by depositing the same in United States mail, first class postage prepaid, registered or certified mail, return receipt requested.'' Upon expiration of the original fifteen-year lease, Kelly-Moore timely informed the lessor by certified letter of its intent to extend the lease an additional five years. The first fiveyear extension was due to expire on August 31, 1997. On the last day of the six-month notification deadline, Kelly-Moore faxed a letter of renewal notice to Osprey's office at 5:28 P.M. In addition, Kelly-Moore sent a copy of the faxed renewal notice letter by Federal Express that same day. Osprey denies ever receiving the fax, but it admits receiving the Federal Express copy of the notice on the following business day. Osprey rejected the notice, asserting that it was late, and it filed an action to remove the defendant from the premises. After a trial on the merits, the trial court granted judgment in favor of Kelly- Moore, finding that the faxed notice was effective. Osprey appealed. The Court of Civil Appeals reversed, determining that the plain language of the lease required that it be renewed by delivering notice either personally or by mail, and that Kelly-Moore had done neither. Kelly-Moore appealed.
DECISION The decision of the Court of Appeals is vacated and the decision of the trial court is affirmed.
OPINION Kauger, J. The precise issue of whether a faxed or facsimile delivery of a written notice to renew a commercial lease is sufficient to exercise timely the renewal option of the lease is one of first impression in Oklahoma. Neither party has cited to a case from another jurisdiction which has decided this question, or to any case which has specifically defined ''personal delivery'' as including facsimile delivery.
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Osprey argues that (1) the lease specifically prescribed limited means of acceptance of the option, and it required that the notice of renewal be delivered either personally or sent by United States mail, registered or certified; (2) Kelly- Moore failed to follow the contractual requirements of the lease when it delivered its notice by fax; and (3) because the terms for extending the lease specified in the contract were not met, the notice was invalid and the lease expired on August 31, 1997. Kelly-Moore counters that (1) the lease by the use of the word ''shall'' mandates that the notice be written, but the use of the word ''may'' is permissive; and (2) although the notice provision of the lease permits delivery personally or by United States mail, it does not exclude other modes of delivery or transmission which would include delivery by facsimile. ***
A lease is a contract and in construing a lease, the usual rules for the interpretation of contractual writings apply. ***
Language in a contract is given its plain and ordinary meaning, unless some technical term is used in a manner meant to convey a specific technical concept. A contract term is ambiguous only if it can be interpreted as having two different meanings. *** The lease does not appear to be ambiguous.
''Shall'' is ordinarily construed as mandatory and ''may'' is ordinarily construed as permissive. The contract clearly requires that notice ''shall'' be in writing. The provision for delivery, either personally or by certified or registered mail, uses the permissive ''may'' and it does not bar other modes of transmission which are just as effective.
The purpose of providing notice by personal delivery or registered mail is to insure the delivery of the notice, and to settle any dispute which might arise between the parties concerning whether the notice was received. A substituted method of notice that performs the same function and serves the same purpose as an authorized method of notice is not defective.
Here, the contract provided that time was of the essence. Although Osprey denies that it ever received the fax, the fax activity report and telephone company records confirm that the fax was transmitted successfully, and that it was sent to Osprey's correct facsimile number on the last day of the deadline to extend the lease. The fax provided immediate written communication similar to personal delivery and, like a telegram, would be timely if it were properly transmitted before the expiration of the deadline to renew. Kelly-Moore's use of the fax served the same function and the same purpose as the two methods suggested by the lease and it was transmitted before the expiration of the deadline to renew. Under these facts, we hold that the faxed or facsimile delivery of the written notice to renew the commercial lease was sufficient to exercise timely the renewal option of the lease.
INTERPRETATION Where the language in the offer or the circumstances does not otherwise indicate, an offer to make a contract shall be construed as authorizing acceptance in any reasonable manner.
CRITICAL THINKING QUESTION Are there instances in which an offeror should require a certain mode for acceptance? When?