A commercial lease agreement includes the following clause: "The tenant agrees to pay the landlord $5,000 each month on the first day of the month." The contract contains no additional terms regarding timing of payment. The tenant pays the landlord on the second day of the month for six consecutive months. The landlord then sues the tenant, claiming a material breach of the agreement. The tenant argues that the landlord's behavior amounted to acceptance of late payments. How should the court determine whether the landlord's conduct modifies the terms of payment in the contract?
By deciding whether late payments could constitute a breach by the tenant, based on the contract terms and landlord behavior.
By enforcing the clause while reviewing evidence of payment patterns.
By interpreting the original written terms and the contract language.
By examining the landlord's conduct to determine whether it demonstrates assent to the tenant's late payments.
The correct answer reflects the principle that courts look at the actions of the parties, or their course of performance, to interpret intent and potentially modify contractual terms. The landlord's repeated acceptance of late payments could indicate assent to a change in the payment timing. The incorrect answers fail to encompass the importance of party conduct in contract interpretation. For instance, while the written terms are significant, courts often consider supplemental evidence such as consistent behavior. Similarly, deciding a breach without considering the landlord’s behavior disregards the dynamic nature of contractual relationships, and an approach limited to enforcing the clause without analyzing payment patterns ignores key interpretive tools.
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