Parties Did Not Agree on Meaning of Insurance Requirement

A tenant and an owner signed a preprinted lease form. A handwritten portion of the lease stated that the tenant must “maintain appropriate insurance.” Paragraph 6 of the lease required the tenant to maintain “public liability” insurance for the benefit of the parties. The parties left blank the coverage amounts. The owner later sued the tenant, claiming that the tenant had defaulted under the lease by not maintaining and delivering the insurance coverage required by Paragraph 6, as the tenant had gotten “garage liability” insurance, and not “public liability” insurance.

A Connecticut appeals court ruled that the tenant was not in default of its lease obligation to maintain insurance coverage, because there was “no meeting of the minds” on the type of insurance the tenant had to maintain. The court noted that the lease did not specify what “public liability” insurance meant and that none of the owner's prior dealings with the tenant would have enabled the court to interpret its intended meaning.

The term “public liability insurance” was “so vague and indefinite as to be unenforceable,” said the court. Plus, the parties never agreed on the amount of insurance coverage that the tenant had to maintain.

• Gallogly v. Kurrus: No. AC 26581, 2006 Conn. App. LEXIS 428 (Conn. App. Ct. 9/26/06).