Background
Euphoric, LLC attempted to lease a commercial property in Kansas City, Missouri, from 4128 Broadway, LLC. The parties signed a document that left the commencement date blank. Euphoric later sued for breach of contract and sought a preliminary injunction to take possession of the premises. The district court denied the motion, citing the statute of frauds and lack of irreparable harm. Euphoric appealed the denial of the injunction and a subsequent motion for reconsideration.
The court’s reasoning
The court affirmed the district court’s decision. Under Missouri law, a lease for a term longer than one year must satisfy the statute of frauds, which requires essential terms to be in writing. The commencement date is an essential term, and the document here left it blank. Euphoric failed to show that the lease satisfied the statute of frauds or that it met the rigorous requirements for the part performance exception. Additionally, Euphoric failed to demonstrate a threat of irreparable harm, as its financial losses were compensable through damages and it delayed seeking relief for over six months.
Because Euphoric and Broadway did not commit the purported lease’s commencement date to writing and that date is an essential term, Euphoric has failed to show that its purported lease satisfies the statute of frauds.
Opinion at 8
What it means going forward
Businesses must ensure that all essential terms, including the commencement date, are explicitly written in lease agreements exceeding one year to satisfy the statute of frauds. Parties seeking preliminary injunctions must prove both a likelihood of success on the merits and a threat of irreparable harm.