A lessee sent notice of exercising an option to extend the lease period for three additional years, but in the notice stated that the option is subject to certain commercial terms to be granted by the lessor to a replacement lessee.
The Court held that the exercise of the option is invalid. An option in a lease agreement is an "irrevocable offer" which results in the lessor’s inability to withdraw from the offer. The execution of an option must be carried out by strict compliance with the terms of the option and the manner prescribed for its operation in the agreement. The exercise notice was not duly executed because it included additional terms contrary to the agreement and therefore constituted a new offer that was not accepted by the lessor and cannot be regarded as a binding agreement.