Muthoga entered into a five year lease agreement for office premises with Njenga. After the end of the lease period, the parties agreed that Njenga would continue occupying the office premises for another five years. On that basis, Njenga made extensive renovations to the office premises.
Muthoga has now given Njenga notice to vacate the office premises claiming that the lease agreement had expired.
Advise Njenga on his legal rights. (8 marks)
ANSWER
• This problem is based on the equitable doctrine of promissory estoppel.
• Muthoga and Njenga have a contractual relationship underwhich Muthoga is entitled to remain in occupation of the premises for five years.
• Relying on this promise Njenga made extensive renovations of the premises only for Muthoga to give notice of termination.
• It is inequitable for Muthoga to terminate the lease as Njenga relied on his promise and has changed his legal position to his detriment. Muthoga should be estopped from terminating the lease.
• My advise to Njenga is to disregard the notice and wait for Muthoga to sue him. He can then plead promissory estoppel on the basis of Muthogas promise.
• My advise is based on the decision in Century Automobiles V. Hutchings Biemer Ltd whose facts were substantially similar.