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LAWS10177 Commercial Leases Question and Answers
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Question:There is a need to for a clear and comprehensive set of rules to control the way in
which a landlord may terminate a lease as a consequence of the right to irritate a
lease: these may be fair while at the same time avoiding complex and expensive
litigation (Scottish Law Commission Report on Irritancy in Leases of Land)
Critically evaluate whether the report’s recommendations relative to the conventional
irritancy of commercial leases meet this objective.
Word Count: 4,076.
Page 1 of 15
, INTRODUCTION
Before evaluating the recommendations proposed by the Scottish Law Commission
(the “Commission”), the law of irritancy and the problems surrounding it must be
understood. I aim to give a brief overview of the law of irritancy, with the intention
that this can be used as a guide to understand whether the Commission’s
recommendations meet two of their objectives: (i) if the rules may be fair and (ii)
whether it would avoid complex, timely and expensive litigation. Irritancy is generally
regulated by common law principles, with the exception of some statutory controls
found in the Law Reform (Miscellaneous Provisions) (Scotland) Act, 1985 1.
The right to irritate can be understood as the landlord’s right to bring to an end a
lease prematurely owing to the tenant’s breach of an obligation(s) 2. Three
conclusions are observed: (i) the right is only available to the landlord; (ii) it is
triggered when a tenant is in breach of his obligations; and (iii) once the right is
invoked it brings the lease to an end. Something can be said about the third part of
the conclusion: the effect of the right to irritate not only brings to and end the future
obligations, but also to “treat the contract as though it never existed i.e. to terminate
the lease with retrospective effect. 3” It is thus common for irritancy clauses to reserve
the landlord’s “right to exercise all competent remedies in relation to breaches
occurring before the lease is irritated.4” In addition, it brings to an end those rights
arising out relationships between the landlord and for example, subtenants and
heritable creditors5.
I am in agreement with the Commission, who claim that the main purpose of the right
to exercise irritancy is that it “acts as a compulsitor to performance of the tenant’s
obligations.6” If irritancy is viewed as having the effect of a self- help remedy arising
out of the contractual relationship between the tenant and the landlord, available
against the tenant when he is in breach of his obligations, then the above function of
irritancy is in line with the general theory that remedies favouring performance are
preferred in the Scots law of contract7.
1
Law Reform (Misc. Provisions) (Scotland) Act 1985, ss 4- 7.
2
McAllister, A. 2013. The Scottish Law of Leases. Ch 5, para 5.2.
3
Scottish Law Commission. 2003. Report on Irritancy in Leases of Land. Scot Law Com No 191, p 16, para 3.3.
4
ibid
5
McAllister, A. 2013. The Scottish Law of Leases. Ch 5, para 5.2.
6
Scottish Law Commission. 2003. Report on Irritancy in Leases of Land. Scot Law Com No 191, p 13, para 2.12.
7
MacQueen, H. & Thomson, J, M. 2012. The Law of Contract in Scotland. Ch 5, para 5.5.
Page 2 of 15
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