Rehoboth Mall Ltd. Partnership v. NPC International, Inc.

Summary

The Delaware Supreme Court held that a landlord waived a tenant’s prior lease defaults by accepting the tenant’s first renewal and rent payments without objection. A no-waiver provision operated prospectively and did not permit the landlord to rely on those previously waived defaults to deny a subsequent renewal option.

Holdings

1. The renewal provision extended the original lease rather than creating a new lease because it continued the original lease's rights and obligations, modified only the rental price, and operated automatically without execution of a new lease.
2. A no-waiver provision stating that a failure to insist on strict performance shall not constitute a waiver for the future operates prospectively and does not permit a landlord to revive or enforce past defaults that it waived.
3. RMLP's acceptance of NPC's first renewal, acceptance of rent, and allowance of NPC's continued possession for five years without objection constituted a waiver of the no-default requirement as a matter of law.

Questions Presented

1. Whether the first renewal period constituted a new lease or an extension of the original lease.
2. Whether the lease's no-waiver provision permitted RMLP to rely on defaults that occurred during the original term after RMLP had accepted the first renewal and allowed NPC to remain in possession without objection.
3. Whether RMLP's conduct constituted a waiver of the lease's no-default requirement as a matter of law.

Disposition

affirmed