mitigation of damages

Last week the Supreme Judicial Court of Massachusetts (SJC) held that, despite defaulting only one month into its five-year lease, a commercial tenant is bound by a liquidated damages clause requiring a lump-sum payment of all rent due during the remainder of the lease term. As set forth in Cummings Properties, LLC v. Hines, Massachusetts Constable’s Office Inc. (MCO), entered into a five-year office lease with Cummings Properties, LLC (Cummings).  The defendant Hines, the founder and sole director of MCO, personally guaranteed MCO’s lease obligations, including full payment of rent. One month into the term, MCO lost an important business contract and failed to pay rent the following month. Cummings began eviction proceedings in the state District Court, and one year after MCO vacated the premises, Cummings entered into a four-year lease with a new tenant.

Cummings filed suit in Superior Court against Hines to enforce his obligations as guarantor of the lease. The lease contained a liquidated damages clause that provided the