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Option to Renew Lease Must Have Determinable Price

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In T. B. Guillory, Inc. v. North American Gaming Entertainment Corporation, 1999 La. App. LEXIS 3 (La. App. 3d Cir. Jan. 6, 1999), the Third Circuit Court of Appeal held an option to renew a lease to be unenforceable because it lacked a determinable price. The lease in question was of immovable property (the property was used as a truck stop, restaurant, and video gaming parlor). The renewal clause provided that all terms and provisions would be the same during the renewal term "except the monthly percentage due Lessor shall be negotiable." This decision illustrates the need for a lease, or a renewal thereof, to have a determinable price. It also demonstrates the potential for problems when agreement terms are left open for later negotiation and agreement.

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