LEGAL PRINCIPLE: PROPERTY LAW – Landlord and Tenant – Lease – Validity – Commencement Date – Certainty of Contingent Event – Certificate of Occupancy
PRINCIPLE STATEMENT
When a term is made to commence upon the occurrence of a future contingent event, the test whether there is certainty of the commencement of the term is whether the happening of the contingent event itself is certain. Where the contingent event is vague, or highly speculative or illusory, or its happening can be postponed indefinitely, or is itself dependent on innumerable contingencies, such contingent event will not be regarded as certain.
RATIO DECIDENDI (SOURCE)
Per Ayoola, JSC, in Okechukwu v. Onuorah (2000) NLC-2481993(SC) at pp. 17–18; Paras D–A.
"When a term is made to commence upon the occurrence of a future contingent event, the test whether there is certainty of the commencement of the term is whether the happening of the contingent event itself is certain. Where the contingent event is vague, or highly speculative or illusory, or its happening can be postponed indefinitely, or is itself dependent on innumerable contingencies, such contingent event will not be regarded as certain."
EXPLANATION / SCOPE
For a lease contingent on an event, the event itself must be certain to occur. Vague, speculative, illusory, or indefinitely postponable contingencies render the commencement uncertain, making the lease void. For example, a lease to commence “when a certificate of occupancy is obtained” may be valid if obtaining a certificate is reasonably certain. But if the event is dependent on innumerable contingencies or entirely within one party’s discretion, it may fail for uncertainty. The test is whether the contingency is sufficiently assured to give commercial certainty.