break-clause

---
name: break-clause
description: Turns your break clause into a working exit plan: the clause and every condition precedent copied verbatim, the real diary date to start work, a test of whether rent and every sum due on the break date has actually been paid, a vacant possession check against the case law test, a notice check against how strictly a break notice must be served, who must serve it and who must receive it, and a plain statement of what happens if any of this is missed. Use when you hold a commercial lease in England or Wales with a break clause and you want to use it without losing it on a technicality.
---

# Your break exercised on the date you meant, with the notice, the rent and vacant possession all proved, not assumed

You give this the lease, the break clause, every deed or side letter that varies it, your rent and service charge ledger, and what you know about the state of the premises on the break date. You get back the break clause copied word for word, the real date your solicitor needs to start drafting the notice, a test of whether every pound due on the break date has actually been paid, a vacant possession check run against the test the courts actually use, a notice check against how strictly a break clause must be complied with, and a plain answer to who must serve the notice and who must receive it. It will not tell you whether your break has been validly exercised. That is a question of fact and law for your solicitor on the finished evidence, and answering it for you would be doing the one thing break clause claim history shows is most dangerous: treating a technical question as though it had an obvious answer.

## What it does

1. **Copy the break clause verbatim, and classify what kind of break it is, before doing anything else.** Write out the clause number, full text, every cross reference it makes to other clauses, and whether it is a single fixed break date, a rolling break exercisable at any time after a given date, a tenant-only break, a landlord-only break, or mutual. The RICS Code for leasing business premises records the drafting norm this is tested against: "Any break rights or options for renewal for either party should be clearly specified, including the dates (or range of dates) when a party can end the lease, the length of prior notice to be given and any pre-conditions for the break being effective." A break read from a summary in the heads of terms is a break read wrong, because the pre-conditions live in the lease, not the summary.

2. **Establish the break date, then count backwards to the real notice-service deadline and put a diary date on it, not just the deadline itself.** If the clause requires six months' prior written notice and the break date is 3 April, the deadline for service is 3 October the year before, and the date to start is the day the solicitor needs to review the lease, draft the notice and arrange service, which is weeks earlier again. Time is of the essence for a break notice in the ordinary case, and the case law treats a late notice as no notice at all rather than as a late one that can be cured. Put the deadline and the real work-start date in the file, not only the break date itself.

3. **List every condition precedent in the clause and test each one against the evidence held, not against what the tenant intends to do.** A break clause commonly conditions the exercise on some combination of: paying all rent (and sometimes other sums) due up to or on the break date, giving vacant possession, complying with tenant covenants such as repair, and paying a break premium. Copy the exact wording of each condition, because the difference between "paid the rent" and "paid all sums due under the lease" changes what has to be tested in step 4. A condition not mentioned in the clause is not a condition. A condition mentioned is a condition precedent, and Landmark Chambers' review of the reported cases states the governing principle plainly: "If the tenant is given a privilege (whether a right to renew or break) which can be exercised in certain circumstances and on certain terms, those conditions must be strictly complied with", citing Finch v Underwood (1876) 2 Ch D 310. Strictly complied with means exactly that: not substantially, not in spirit.

4. **Test the rent and interim payments condition, because unpaid sums on the break date are one of the most common ways a break is lost.** If the clause conditions the break on rent having been paid up to the break date, check what "rent" is defined to include: basic rent only, or basic rent plus VAT, insurance rent and interim service charge instalments. An apportioned service charge or insurance instalment falling due near the break date is easy to miss because it often arrives as an estimated demand rather than a reconciled bill, and a shortfall against a strict payment condition can be fatal, because the condition asks whether the sum was paid, not whether the shortfall was material. Build a table of every sum due on or before the break date against what was actually paid and when, from the ledger and bank records supplied. Do not assume a direct debit cleared. Confirm it did.

5. **Test vacant possession against the test the Court of Appeal actually applies, not against what "empty" is assumed to mean.** In NYK Logistics (UK) Ltd v Ibrend Estates BV [2011] EWCA Civ 683, Rimer LJ set out the test at paragraph 44: vacant possession "means what it does in every domestic and commercial sale in which there is an obligation to give 'vacant possession' on completion. It means that at the moment that 'vacant possession' is required to be given, the property is empty of people and that the purchaser is able to assume and enjoy immediate and exclusive possession, occupation and control of it. It must also be empty of chattels, although the obligation in this respect is likely only to be breached if any chattels left in the property substantially prevent or interfere with the enjoyment of the right of possession of a substantial part of the property." NYK lost its break because its own workmen were still in the warehouse after the break date finishing repairs it wanted to do for its own benefit, even though the landlord's interests were not in fact harmed and the judge said so in terms. The court held that was irrelevant: occupying the premises for the tenant's own purposes, even briefly and even helpfully, defeats vacant possession. Test, item by item: are all the tenant's fixtures, fittings, stock and chattels gone; are all subtenants, licensees and occupiers gone; is any tenant workman, contractor or security presence still on site for the tenant's own purposes; have the keys actually been handed over or genuinely offered. A stated intention to leave is not vacant possession. Only the fact of having left is.

6. **Test the notice itself against how strictly a break notice must be served, because Mannai relaxed some interpretation, not the requirement to comply with the clause's own terms.** In Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749, the House of Lords held that a break notice is construed objectively: as Lord Steyn put it, "the construction of the notices must be approached objectively. The issue is how a reasonable recipient would have understood the notices. And in considering this question the notices must be construed taking into account the relevant objective contextual scene." On the facts, a notice that specified 12 January instead of the correct break date of 13 January was still valid because no reasonable landlord would have been left in doubt what was meant. But Mannai has a hard limit, stated by Lord Hoffmann in the same case: "If the clause had said that the notice had to be on blue paper, it would have been no good serving a notice on pink paper, however clear it might have been that the tenant wanted to terminate the lease." Where the lease prescribes a specific requirement, such as service at a named address, service by a named method, or a specified form of words, that requirement must be met exactly. Mannai forgives a genuinely ambiguous error in what the notice communicates. It does not forgive ignoring what the clause actually demands. Test both separately: does the notice communicate the right thing, and does it comply with every procedural requirement the lease sets for it.

7. **Establish who must serve the notice and who must receive it, because getting either wrong is a "blue paper" defect Mannai cannot rescue.** Where the tenant is more than one person or company, all joint tenants must join in serving the notice; a notice given by only one of two joint tenants has been held invalid. Where the reversion or the tenancy has changed hands, serve the current landlord and current tenant as shown on an up to date Land Registry title, not the names on the original lease. Where a guarantor exists, check what the guarantee actually says: an authorised guarantee agreement given on a past assignment cannot be stretched to cover a period after the assignee is released, because section 16 of the Landlord and Tenant (Covenants) Act 1995 fixes that boundary. Record every party who has to act or be told, and where each one's current address or registered office was checked, because serving the tenant's old name or the landlord's old address is a common and entirely avoidable way to lose a break.

8. **Check how the notice must actually reach its recipient, because a posted letter is not automatically good service.** At common law a notice must actually be received; simply posting it is not enough. Section 196 of the Law of Property Act 1925 supplies a statutory alternative most leases rely on: a notice is sufficiently served if it "is left at the last-known place of abode or business in the United Kingdom" of the person to be served, or, under subsection (4), if it is "sent by post in a registered letter addressed to" that person at that address "and if that letter is not returned by the postal operator... undelivered", in which case service is deemed made when the letter would ordinarily be delivered. Check the lease's own service clause first: a lease can restrict or extend these statutory methods, and a method the lease does not permit is not good service however sensible it seems.

9. **Write the plain consequence if any condition is not met, because a failed break is not a delayed break.** Most break clauses, including the one construed in NYK v Ibrend, provide that if the conditions are not satisfied by the break date, the lease continues as if the break had never been exercised. Rent, service charge and every other liability keep running, and in NYK the tenant was left liable for rent for a further eight months after wrongly believing it had left. State this outcome next to whichever condition is untested or unmet, so the owner sees the real cost of an unresolved item, not just a technical flag.

10. **Hand the structured facts to Codex and let it build the files, so no figure or date is retyped by a human.** Run:

    ```
    codex exec --sandbox danger-full-access --skip-git-repo-check -C "<working folder>" - < CODEX.md
    ```

    Claude hands over the break clause verbatim with its clause number, the break date and notice period, the payment ledger, what the owner reports about the state of the premises and who remains on it, the parties and any guarantee documents, and the owner's own answers on what evidence exists. Codex returns the conditions test, the payment table, the vacant possession checklist, the notice service record, the parties record and a gaps register. Codex makes no finding about whether the break has been validly exercised.

## Then it checks

1. The break clause is copied verbatim with its clause number, and every condition precedent is listed in the clause's own words, not paraphrased.
2. The notice-service deadline is calculated backwards from the break date using the notice period stated in the clause, a real diary date is given for when work must start, and the file states whether the clause makes time of the essence.
3. Every sum that falls due on or before the break date, including any apportioned service charge or insurance instalment, is tested against a dated payment record, and no sum is marked paid without a source document.
4. The vacant possession checklist tests chattels, fixtures, subtenants, occupiers and the tenant's own workmen or security presence separately, and reaches a stated conclusion on each, not a general impression.
5. The notice service record states who served it, on whom, by what method and on what date, tested against both the break clause's own wording and the lease's general service clause.
6. The file names every party who must serve or receive the notice, including joint tenants, the current landlord and any guarantor, with the source used to confirm each identity and address.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is.
- This skill covers England and Wales only. Scottish leases are governed by Scots law and English break clause case law does not transfer directly to them. Northern Ireland runs its own law. If the premises are in Scotland or Northern Ireland, say so and stop rather than applying an England and Wales analysis to a lease that is not governed by it.
- Never state rent as a percentage of turnover, or any other benchmark figure, as a test of whether a break is worth exercising. No published figure exists for a single independent UK venue, and an owner who weighs a real decision against a borrowed percentage is arguing from a number that is not evidence.
- Never treat Mannai as forgiving a defect the lease itself makes a strict requirement. Mannai relaxes how a notice's content is read where the clause leaves room for interpretation. It does not relax a requirement the clause states in absolute terms, such as who must serve the notice, on whom, or by what method.
- Never mark a condition precedent satisfied on the owner's intention or belief. Mark it satisfied only against a dated document: a bank statement, a meter reading, a signed handover record, a courier receipt.
- Never conclude that a break has been validly exercised. This skill tests each condition against the evidence supplied and reports what is proved, what is missing and what is contradicted. Whether that adds up to a valid break is a judgement for the owner's own solicitor, on the complete file, because reported cases turn on small facts a document review cannot always see.
- This output is a working document prepared for the owner's own solicitor to check before any notice is served or relied upon. It applies published case law and the terms of the lease supplied to test a break clause. It is not legal advice, and it is not a finding that any break has been or will be validly exercised.

## Built from
- Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 (House of Lords), quoted from Camilla Lamont, "Serving Break Notices: Avoiding the Pitfalls", Landmark Chambers, https://www.landmarkchambers.co.uk/wp-content/uploads/2018/07/Serving_Break_Notices_Avoiding_the_Pitfalls.pdf, 30 April 2012, read 23 September 2026: Lord Steyn's reasonable recipient test and Lord Hoffmann's blue paper example, in step 6.
- NYK Logistics (UK) Ltd v Ibrend Estates BV [2011] EWCA Civ 683 (Court of Appeal), reported as Ibrend Estates BV v NYK Logistics (UK) Ltd [2011] 4 All ER 539, https://gatehouselaw.co.uk/wp-content/uploads/2018/03/NYK-v-Ibrend.pdf, judgment given 16 June 2011, read 23 September 2026: Rimer LJ's test for vacant possession at paragraph 44, and the consequence of a failed break, in steps 5 and 9.
- Camilla Lamont, "Serving Break Notices: Avoiding the Pitfalls", Landmark Chambers seminar paper, https://www.landmarkchambers.co.uk/wp-content/uploads/2018/07/Serving_Break_Notices_Avoiding_the_Pitfalls.pdf, 30 April 2012, read 23 September 2026: the strict compliance principle from Finch v Underwood in step 3, the time of the essence discussion of Hexstone Holdings Ltd v AHC Westlink Ltd in step 2, and the joint tenants and joint landlords authorities in step 7.
- Law of Property Act 1925, section 196, https://www.legislation.gov.uk/ukpga/Geo5/15-16/20/section/196, read 23 September 2026 as the current revised text: the statutory methods of service in step 8.
- Landlord and Tenant (Covenants) Act 1995, section 16, https://www.legislation.gov.uk/ukpga/1995/30/section/16, read 23 September 2026: the limit on an authorised guarantee agreement's duration in step 7.
- RICS, "Code for leasing business premises", RICS professional standard, England and Wales, 1st edition, February 2020, effective from 1 September 2020, https://www.rics.org/content/dam/ricsglobal/documents/standards/February_2020_Code_For_Leasing_Business_Premises_England_And_Wales_1st_Edition.pdf, read 23 September 2026: the drafting norm for specifying break dates, notice and pre-conditions in step 1, and the repayment of rent and service charge after a break in step 9.
- Gosschalks Solicitors, "The 'Mannai principle': Minor defects can be saved, but don't get too complacent", https://www.gosschalks.co.uk/blog/2023/03/27/the-mannai-principle-minor-defects-can-be-saved-but-don-t-get-too-complacent, published 27 March 2023, read 23 September 2026: a plain English restatement of the reasonable recipient test used to cross-check step 6.

# break-clause

## You are given
The break clause and its full clause number, copied verbatim from the lease, including every cross-reference it makes to other clauses (rent definition, service charge, repair covenants). The break date and the notice period stated in the clause, and whether the clause states time is of the essence. Every condition precedent named in the clause, in the lease's own words. The rent, service charge and insurance ledger for the period up to and including the break date, with every sum due, every sum paid, and the date each payment cleared, as supplied by the owner from bank records or accounting software. The owner's own account of the state of the premises on and after the break date: what chattels, fixtures, stock or workmen remained, whether keys were handed over and when, and whether any subtenant or occupier was still in place. The identity of every party who holds an interest that could require notice: the tenant, any joint tenant, the current landlord as confirmed against an up to date source, and any guarantor with the guarantee document that applies to them. The notice actually drafted or served, if one exists, and the date and method of service. The lease's general service of notices clause, copied verbatim, alongside the break clause itself. All judgement calls, including whether to serve a notice at all and how any borderline item is to be treated, have already been made by the owner or their solicitor and are supplied to you.

## Produce
Write into a `./break-clause-output/` folder:

1. `break-clause-facts.md` recording, on separate lines and nothing else: the clause number; the break clause copied verbatim; the break date; the notice period stated; whether time is of the essence is stated and its exact wording if so; and the calculated notice-service deadline with the arithmetic shown (break date minus notice period).
2. `conditions-precedent.csv` with columns in this order: `condition_ref`, `condition_type`, `clause_wording_verbatim`, `tested_against`, `status`, `evidence_document`, `evidence_date`. `condition_ref` is C001 upward. `condition_type` is exactly one of `payment_of_rent`, `payment_of_other_sums`, `vacant_possession`, `compliance_with_covenants`, `break_premium`, `other`. `status` is exactly one of `satisfied`, `not satisfied`, `cannot determine from documents supplied`. Every row with `cannot determine from documents supplied` is listed in `gaps.md`.
3. `payments-due-on-break-date.csv` with columns: `payment_ref`, `payment_type`, `amount_due_gbp`, `due_date`, `amount_paid_gbp`, `date_paid`, `shortfall_gbp`, `source_document`. `payment_type` is exactly one of `basic_rent`, `vat_on_rent`, `service_charge_interim`, `insurance_rent`, `break_premium`, `other`. `shortfall_gbp` is `amount_due_gbp` minus `amount_paid_gbp`, left empty only where `date_paid` is also empty, in which case the row is listed in `gaps.md`. Never estimate a due amount that was not supplied.
4. `vacant-possession-checklist.csv` with columns: `item_ref`, `category`, `description_verbatim`, `present_on_break_date`, `source`, `notes`. `category` is exactly one of `tenant_chattels_or_stock`, `tenant_fixtures`, `subtenant_or_occupier`, `tenant_workmen_or_contractors`, `keys`, `security_presence`, `other`. `present_on_break_date` is exactly one of `yes`, `no`, `not stated`. Every `not stated` row is listed in `gaps.md`.
5. `notice-service-record.csv` with columns: `served_by_verbatim`, `served_on_verbatim`, `method`, `date_sent`, `date_received_or_deemed`, `complies_with_break_clause_wording`, `complies_with_general_service_clause`, `evidence_document`. `method` is exactly one of `hand delivery`, `first class post`, `registered or recorded post`, `fax`, `email`, `other`. The two `complies_with` columns are `yes`, `no` or `cannot determine`. Never mark either `yes` without a named evidence document.
6. `parties-and-notice-obligations.csv` with columns: `party_role`, `name_verbatim`, `address_or_registered_office_verbatim`, `source_of_identity_check`, `date_of_identity_check`, `notice_obligation`. `party_role` is exactly one of `tenant`, `joint_tenant`, `landlord`, `joint_landlord`, `guarantor`. `notice_obligation` is exactly one of `must serve`, `must receive`, `both`, `neither`. Any party whose identity was checked against a document dated more than three months before the notice date is flagged in `gaps.md`.
7. `gaps.md` a numbered list of: every condition precedent marked `cannot determine from documents supplied`; every payment row with no `date_paid`; every vacant possession item marked `not stated`; every notice compliance column marked `cannot determine`; every party whose identity check is stale or missing; and any figure or date the owner supplied without a source document.

## Rules
- Codex extracts, dates, calculates and flags gaps. It never decides whether a break has been validly exercised, never decides whether a condition precedent has in substance been met where the evidence is ambiguous, and never advises on what to do about a missed deadline or an unpaid sum. Those are the solicitor's judgement calls.
- Never estimate a missing figure or date. A payment with no supplied date has an empty `date_paid` cell and a line in `gaps.md`. A partially evidenced condition is reported as `cannot determine from documents supplied`, never rounded up to `satisfied`.
- Never mark a condition `satisfied` or a vacant possession item `no` (meaning absent, and so compliant) on the owner's statement of intention. Only a dated document supports either conclusion.
- Never write a rent-as-percentage-of-turnover figure, a market benchmark, or any industry average into any file. No such figure exists for a single independent UK venue and none is to be recorded.
- Never carry forward a party's name or address from an earlier lease document without the date it was checked. A landlord or tenant identity is only as good as the date it was last confirmed.
- Use British English, GBP written as `GBP` or the pound sign, and DD Month YYYY dates. No em dashes in any file you write, and any supplied text containing one is recorded verbatim and flagged in `gaps.md`.
- Every quoted clause, party name and document title is copied exactly, including its punctuation and capitalisation.
- Every file ends with this line: this is a working document prepared for the owner's own solicitor to check before any notice is served or relied upon. It tests supplied evidence against the terms of the lease and published case law and is not a finding that any break has been or will be validly exercised.

## Return
The absolute path of every file written, the row count of each CSV, the break date and the calculated notice-service deadline from `break-clause-facts.md`, the count of conditions precedent by status (satisfied, not satisfied, cannot determine), the total shortfall in GBP across `payments-due-on-break-date.csv` or the word none where every row is fully paid, the count of vacant possession items marked present or not stated and which categories they fall in, whether the notice service record shows both compliance columns as yes, the count of parties whose identity check is stale or missing, and the `gaps.md` item count.