An unbalanced legal relationship

If I seem to be getting more than my fair share of complaints about the heavy-handed behaviour of the two leading pub-lease companies at the moment, there are several reasons.

The first is that they have most lessees, so they are bound to be in the majority. That is no indication that they are any better or worse than any of the others.

The second is that times are hard, without doubt, and that is when the restricting terms of the lease (the contract) really start to bite.

But two recent letters from readers point to the rather uneven nature of the relationship between pub operator and tenant/lessee. The first concerns missing deliveries and the second concerns cellar monitoring.

Incomplete delivery of orders is nothing new. Major operators have a logistic problem servicing all their outlets, and sometimes things do not go smoothly. The problem is that, in the main, the sufferer is the licensee.

There have been great strides in recent years in educating pub licensees in stock control and correct ordering. But when you are virtually living hand to mouth, it isn't easy to keep a completely adequate back-up stock in a case a delivery goes awry.

But there's the rub. You cannot get your supplies from another source to tide you over - at least not legally. The tie sees to that. Breach of the tie, or buying out, is still considered the greatest sin in the book, and this is reflected in the wording of the lease or tie agreement.

However, that makes the contract very lop-sided. Who monitors the adequacy of the service? At what stage does the failure to deliver itself breach the contract? And does that allow the pub licensee to take emergency action?

Big questions. The operating companies are adamant that the tie must be upheld and that means no buying out at all. You could, I suppose, attempt to insert a clause in the lease similar to the one covering abatement of rent during forced closure of the premises, allowing a buy-out if necessary. But that would be open to all kinds of abuse, say the companies.

Much depends on the nature of the relationship between the parties. I do not, I confess, pick up much improvement here, in spite of protestations that things have got better. There is so much mutual suspicion that it is far more likely that the suppliers reach for the rule book when things go wrong.

This leads me to cellar monitoring. It is rather like the police wanting everyone's DNA or fingerprints, on the basis that "if you are innocent you have nothing to fear".

It is, however, the assumption that buying out is so endemic that everyone would do it if they weren't controlled, which so undermines the idea that there is any form of mutual trust in the industry.

I think the operating companies are treading warily only because they might think they are on shaky legal ground in insisting on installing such equipment in existing leased premises without a very good reason. There is meant to be an arm's-length relationship in a lease - even a pub lease - which places some obligations on the lessor as well as the lessee. The fact that the lease is written entirely by the former and is often non-negotiable suggests that any idea of an equal legal relationship is very hard to sustain.