Notices – The Importance Of Getting It Right

The consequences of making mistakes when issuing notices, whether under a franchise agreement or lease, can be substantial. A recent decision of the New South Wales Administrative Decisions Tribunal emphasised this point when a franchisor was found not to have validly exercised an option for a further term under a lease.

In Almaron Pty Ltd v Jonamill Pty Ltd, the landlord let premises to a franchisor tenant for five years, with an option for a further five years. As is typically the case, the option could be exercised by giving notice in writing sent by registered post to the landlord's address in the lease, or a new address notified by the landlord. The landlord sent the franchisor a letter in March 2007 notifying a new address, but did not refer in that letter to the lease or the premises. Some months later, when attempting to exercise the option for a further term, the franchisor sent a letter by ordinary post to the old address of the landlord.