94 N.J.L. 311, 110 A. 831 (Sup. Ct. 1920)
The plaintiffs, as landlords, and the defendants, as tenants, entered into a lease agreement that included a clause prohibiting underletting or assignment of the premises.1 This restriction was designed to preserve the landlord's ability to select appropriate tenants, a right deemed significant for the effective care and management of the property.2
Subsequently, the defendants vacated the leased premises during the term.3 While they acknowledged their liability for damages arising from the breach, they maintained that the landlords had an obligation to mitigate those damages either by securing a new tenant or by accepting one proposed by the defendants.4
The dispute was presented to a trial judge, who ruled in favor of the landlords.5 On appeal, the Supreme Court of New Jersey affirmed the judgment in an opinion written by Justice Swayze.6
Whether a landlord has a duty to minimize a tenant's damages by reletting vacated premises or accepting a new tenant offered by the original tenant when the lease prohibits underletting or assignment?7
When a lease contains a prohibition on underletting or assignment, the landlord has no duty to minimize the tenant's damages by reletting the vacated premises or accepting a new tenant proposed by the original tenant.8
No. The lease prohibited underletting or assignment.9 Such a provision demonstrates that the landlord meant to have a right to choose his tenants, a right which might be of great importance to him in the proper care and management of his property.10 The defendants admitted liability to damages but claimed that the landlord should have minimized them.11 The terms of the lease are equally inconsistent with the claim that the landlord must make an effort to secure a tenant to minimize the damages.12
It would be a novel doctrine that would force the landlord to give his time to hunting someone to contract with him for the purpose of helping the tenant out of a liability to damages which the tenant had brought on himself.13 Reason is with the holding by the trial judge and the great weight of authority is with him also.14
A landlord has no duty to minimize a tenant's damages by reletting vacated premises or accepting a new tenant when the lease prohibits underletting or assignment.15