What Exactly Does ‘First Class’ Mean in Lease?

July 19, 2012
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Q: I have a lease clause that requires me to sell “first-class products.” What exactly does this mean?

A: The meaning of “first class” products or a “first class” business in a lease can vary widely and can be the source of a dispute if you and the owner of the space you rent have a different understanding about what this term requires you to do. But you can avoid this by adding synonyms or exclusions to convey the meaning of “first class” in your lease’s use clause.

Without specific details as to the meaning of “first class,” the term will be too vague, and may mean different things to different people or in different industries. The owner could argue that your products or business don’t meet the first-class requirement. Require the owner to string the synonyms together—for example, “first-class, luxury, premium, or high-end”—or list exclusions—for example, “first-class, excluding, without limitation, discount or close-out items.” That better conveys the intended meaning of “first class” and helps set a clearer quality level for your products or business, reducing the potential for disputes. Additionally, this method has helped judges, who were forced to interpret disputed leases, better understand the parties’ intended meaning of the term “first class.”