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Know who you are suing

Discussion: Stekel v. Toyota Canada Inc (2011 Ont SC) emphasizes the importance of knowing who your counterparty is, in the event that you decide to litigate. Although the plaintiff, in this case, was permitted to add the correct party as a defendant after the limitation period had expired, unnecessary litigation expense could have been avoided had the initial filing been done correctly.

The plaintiff was driving a Lexus that had been leased from the defendant, who was carrying on business as Scarborough Lexus Toyota (“SLT”).

At one point the vehicle suddenly hesitated and lurched forward. The driver lost control of the vehicle and got into an accident, which caused her significant physical injuries. In the Statement of Claim, the plaintiffs commenced an action against three defendants: Toyota Canada Inc. (TCI), Toyota Credit Canada Inc. (TCCI) and SLT, seeking damages in the amount of $1,100,000. The plaintiffs alleged that TCI was engaged in the business of “manufacturing, servicing and selling automobiles” and was the manufacturer of the plaintiff’s motor vehicle. However, TCI was not engaged in the business of manufacturing automobiles and did not manufacture the plaintiff’s vehicle.

The car was manufactured by the “Toyota Motor Corporation” (TMC).

The Court of Appeal for Ontario has made it clear that a plaintiff’s pleading concerning a “misnomer” will be correct where it is apparent (1) that the plaintiff intended to name the defendant; and (2) that the intended defendant knew it was the intended defendant in relation to the plaintiff’s claim. Moreover, such a misnomer can be corrected after the expiry of the limitation period.

Limitations Act, 2002
If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.
Subsection (1) does not prevent the correction of a misnaming or misdescription of a party.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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WFOE in China and Their Role in a Commercial Lease

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Depending on the circumstances of the parties involved in a commercial lease agreement, the name of the tenant on the lease can vary where a wholly foreign owned enterprise is leasing the property.

Choosing who to name as the tenant is a significant issue and — as is typical for so much else in China — different cities require different procedures. The following two approaches are typically followed in China for the tenant of a wholly foreign owned enterprise (“WFOE”) to be: Specify the U.S. (or other foreign country) parent company as the tenant on the lease, or specify the WFOE as the tenant. Determining how to proceed regarding the named tenant requires input from the local government authorities who will approve the WFOE. If your lease does not handle the lessee issue properly, the government generally will not approve your WFOE and/or you will end up having to incur all sorts of additional landlord and contracting costs.

Read the article here.

Take away:

  • Check with local government authorities before naming the parties to a commercial lease agreement in China.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Tips to Consider When Renewing a Commercial Lease

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Parties to a commercial lease who wish to negotiate a renewal must make sure they are negotiating with the right person. For example, franchisee tenants may have to negotiate with the landlord directly, or negotiate with a property manager, a real estate agent or an in-house representative. Do some research about the landlord, and start preparing to negotiate 9 to 12 months in advance of the renewal.

When renewing a commercial lease, there are some factors parties need to take in consideration. Researching the other party is one important factor that parties often neglect. Reviewing the terms of the original lease is also important, as situations related to the terms may have changed over the course of the lease. One of the most important pieces of advice given in the article is to always negotiate the terms. As a returning customer, the tenant may be eligible for incentives if they choose to renew the lease.

Read the article here.

Take away:

  • When renewing a commercial lease, parties must research the other party and the opportunities that may be available to them in negotiating a lease renewal.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Guarantors: The Third Party to a Lease Agreement

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Where a commercial lease agreement so provides clearly and unambiguously, a guarantor can continue to be a guarantor upon the renewal of the lease.

This article discusses a case where a landlord was able to collect on the debt of a commercial tenant who had a guarantor sign the lease on behalf of the tenant. The landlord was awarded judgment in the amount of $324,119.20 plus costs against the tenant and the guarantor because the lease and guaranty were clear and unambiguous. Landlords may wish to include a guarantor as a party to a lease if there is concern about the payment of rent. If so, care should be taken to ensure the terms of the lease and the provisions binding the guarantor are clear, unambiguous and consistent.

Read the article here.

Take away:

  • Guarantor’s’ obligations can carry over to the renewed commercial lease agreement, if the agreement clearly stipulates their duties and obligations during the original term.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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