Based on this finding and the additional fact that overages constituted a substantial portion of the rent (discussion follows), an ICCO was deemed to exist.
The rent provisions within a lease and the tenant's past rent payments are important considerations in deciding whether an ICCO exists.
Thus, there is less reason to find an ICCO. The difficulty arises because most cases fall somewhere in between.
The assignability issue generally arises when the tenant argues that the right to assign negates an ICCO.(20) This appears to be the case where the lease does not address as signability at all,(21) or where the tenant has been granted the right to assign without the landlord's consent?2
Courts have taken into consideration several additional factors from time to time in deciding whether to find an ICCO. For example, the fact that the leasehold premises were built specifically to suit the tenant has been regarded as an important factor(27)
Such provisions standing alone do not give rise to an ICCO.(29) Nevertheless, when a tenant goes dark without a sublessee to take over the space, it is certainly arguable that the tenant is in default, triggering a breach and justifying termination or damages regardless of whether the lease contains an ICCO.(30)
Where the lease is unclear or ambiguous, it is an error for the trial court to dismiss the landlord's complaint without a hearing to determine the parties' intent.(31) But if the lease is clear and does not require the tenant to continuously occupy the premises, the court can exclude parol evidence and decline to find an ICCO as a matter of law?(32)
Unfortunately, many of the cases appear to be result oriented; that is, the court concludes there should not be an ICCO (possibly because of the type of relief the landlord is seeking) and then justifies that outcome by stating, for example, that the base rent is substantial.
Woolworth The court viewed the base rent as substantial because the tenant had never before paid percentage rent, and on that basis refused to find an ICCO. However, the fact that percentage rent had not been paid as of the date of vacating should not mean that it was not an important element in the negotiations or that a substantial sum would not be paid over the balance of the lease term.
The outcome of a case involving a ICCO breach often depends on the nature of the remedies sought.
As stated in Mercury Investment, a court will not order a tenant to do "more business One court has gone so far as to hold that an ICCO is not breached where the tenant closes down one-half of its business operations.(35)
For the outcome of a lawsuit for injunctive relief will depend on whether an ICCO is found to exist.