ContractsIntermediateArizona Exam

An Arizona commercial lease includes a 'continuous operation clause.' This means the tenant:

AMust keep the space physically occupied by employees or inventory at all times, including legal holidays, to avoid triggering a go-dark default under the lease
BMust operate their business continuously during business hours for the lease term, which can be critical for percentage rent leasesCorrect
CMay temporarily close for up to 30 consecutive days per year without triggering the clause, as long as the tenant provides prior written notice to the landlord
DMust maintain a minimum staffing level of at least two employees during all required business hours specified in the lease agreement

Why Must operate their business continuously during business hours for the lease term, which can be critical for percentage rent leases Is Correct

Answer B: Must operate their business continuously during business hours for the lease term, which can be critical for percentage rent leases

A continuous operation clause requires the tenant to remain open and operating during normal business hours throughout the lease term—particularly important in shopping centers where the landlord wants stores open to generate foot traffic and percentage rent.

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

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