How Can I End an Oral Lease Early in Alabama?

Full question:

We are renting a condo and have been for 16 months with an original understanding with no signed lease for one year. However, after the first 9 months the landlord raised the rent by $200 which we agreed to since we desired to stay. Now we have found a house to buy and wish to leave at the end of December. We told him we would be leaving then and would pay through january. We have no written nor signed lease but he says we have to pay $ 5000.00 January 1 2010 to 'break the lease' or he will sue us for lost rent through June. Do we have any defense or must we pay the $5000. He does say we had a verbal agreement and that is just as good as a signed lease. Thanks for any assistance.

• Category: Landlord Tenant
• Subcategory: Lease Termination
• Date: 04/07/2025
• State: Alabama

Answer:

If the lease terms don't allow for early termination, the tenant may be held liable for the remainder of the lease, unless the tenant can prove a breach of the lease terms by the landlord. However, the landlord has a duty to mitigate (lessen) damages by making reasonable attempts to relet the premises. This generally means that the landlord must advertise the premises and make attempts to show the premises to prospective tenants. It will be a matter of subjective determination for the court, based on all the facts and circumstances involved, whether reasonable attempts have been made to relet the premises. Some of the factors that may be considered, among others, include the reasons for turning down the prospective tenants and whether the landlord is in fact out of town and unable to show the premises.

In Alabama, agreements that can't be performed within a year must be in writing to be enforceable. Without a written lease, a tenant is generally considered a tenant-at-will and the notice required to terminate the lease will depend on the time period between rent payments. If rent is paid weekly, it is a week-to-week tenancy, if paid monthly, it is a month-to-month tenancy. A month-to-month tenancy at will requires 30 days written notice to terminate the tenancy.

If you wish to use the legal system to resolve the dispute, you may want to review the following general information regarding contract law and breach of contract actions:

Contracts are agreements that are legally enforceable. A contract is an agreement between two parties that creates an obligation to do or refrain from doing a particular thing. The purpose of a contract is to establish the terms of the agreement by which the parties have fixed their rights and duties. An oral contract is an agreement made with spoken words and either no writing or only partially written. An oral contract may generally be enforced the same as a written agreement. However, it is much more difficult with an oral contract to prove its existence or the terms. Oral contracts also usually have a shorter time period within which a person seeking to enforce their contract right must sue. A written contract generally provides a longer time to sue than for breach of an oral contract. Contracts are mainly governed by state statutory and common (judge-made) law and private law. Private law generally refers to the terms of the agreement between the parties, as parties have freedom to override many state law requirements regarding formalities of contracts. Each state has developed its own common law of contracts, which consists of a body of jurisprudence developed over time by trial and appellate courts on a case-by-case basis.

An unjustifiable failure to perform all or some part of a contractual duty is a breach of contract. A legal action for breach of contract arises when at least one party's performance does not live up to the terms of the contract and causes the other party to suffer economic damage or other types of measurable injury. A lawsuit for breach of contract is a civil action and the remedies awarded are designed to place the injured party in the position they would be in if not for the breach. Remedies for contractual breaches are not designed to punish the breaching party. The five basic remedies for breach of contract include the following: money damages, restitution, rescission, reformation, and specific performance. A money damage award includes a sum of money that is given as compensation for financial losses caused by a breach of contract. Parties injured by a breach are entitled to the benefit of the bargain they entered, or the net gain that would have accrued but for the breach. The type of breach governs the extent of damages that may be recovered.

Restitution is a remedy designed to restore the injured party to the position occupied prior to the formation of the contract. Parties seeking restitution may not request to be compensated for lost profits or other earnings caused by a breach. Instead, restitution aims at returning to the plaintiff any money or property given to the defendant under the contract. Plaintiffs typically seek restitution when contracts they have entered are voided by courts due to a defendant's incompetence or incapacity.

Rescission is the name for the remedy that terminates the contractual duties of both parties, while reformation is the name for the remedy that allows courts to change the substance of a contract to correct inequities that were suffered. In order to have a rescission, both parties to the contract must be placed in the position they occupied before the contract was made. Courts have held that a party may rescind a contract for fraud, incapacity, duress, undue influence, material breach in performance of a promise, or mistake, among other grounds.

Specific performance is an equitable remedy that compels one party to perform, as nearly as practicable, his or her duties specified by the contract. Specific performance is available only when money damages are inadequate to compensate the plaintiff for the breach.

Promissory estoppel is a term used in contract law that applies where, although there may not otherwise be an enforceable contract, because one party has relied on the promise of the other, it would be unfair not to enforce the agreement. Promissory estoppel arises from a promise which the promisor should reasonably expect to induce action or forebearance of a definite and substantial character on the part of the promisee and which does induce such action or forebearance in binding if injustice can be avoided only by enforcement of the promise. Detrimental reliance is a term commonly used to force another to perform their obligations under a contract, using the theory of promissory estoppel. Promissory estoppel may apply when a promise was made; reliance on the promise was reasonable or foreseeable; there was actual and reasonable reliance on the promise; the reliance was detrimental; and injustice can only be prevented by enforcing the promise. Detrimental reliance must be shown to involve reliance that is reasonable, which is a determination made on an individual case-by-case basis, taking all factors into consideration. Detrimental means that some type of harm is suffered.

Reasonable reliance is usually referred to as a theory of recovery in contract law. It was what a prudent person might believe and act upon based on something told by another. Sometimes a person acts in reliance on the promise of a profit or other benefit, only to learn that the statements or promises were either incorrect or were exaggerated. The one who acted to their detriment in reasonable reliance may recover damages for the costs of his/her actions or demand performance. Reasonable reliance connotes the use of the standard of an ordinary and average person.

The following are AL statutes:

Code of Ala. § 35-9A-441

Periodic tenancy; Holdover remedies.

(a) The landlord or the tenant may terminate a week-to-week tenancy by a written notice given to the other at least 7 days before the termination date specified in the notice.

(b) The landlord or the tenant may terminate a month-to-month tenancy by a written notice given to the other at least 30 days before the periodic rental date specified in the notice.

(c) If a tenant remains in possession without the landlord's consent after expiration of the term of the rental agreement or its termination, the landlord may bring an action for possession and if the tenant's holdover is willful and not in good faith the landlord may also recover an amount equal to not more than 3 month's periodic rent or the actual damages sustained by the landlord, whichever is greater, and reasonable attorney's fees. If the landlord consents to the tenant's continued occupancy, Section 35-9A-161(d) applies.

The landlord has a duty to mitigate (lessen) damages by making reasonable attempts to relet the premises. This generally means that the landlord must advertise the premises and make attempts to show the premises to prospective tenants. The rent received from a new tenant is deducted from the damages the landlord may claim against the former tenant. It will be a matter of subjective determination for the court, based on all the facts and circumstances involved, whether reasonable attempts have been made to relet the premises. Some of the factors that may be considered, among others, include the reasons for turning down the prospective tenants and whether the landlord is in fact out of town and unable to show the premises.

§ 8-9-2. Certain agreements void unless in writing.

In the following cases, every agreement is void unless such
agreement or some note or memorandum thereof expressing the
consideration is in writing and subscribed by the party to be
charged therewith or some other person by him thereunto
lawfully authorized in writing:

(1) Every agreement which, by its terms, is not to be
performed within one year from the making thereof;

(2) Every special promise by an executor or administrator
to answer damages out of his own estate;

(3) Every special promise to answer for the debt, default
or miscarriage of another;

(4) Every agreement, promise or undertaking made upon
consideration of marriage, except mutual promises to marry;

(5) Every contract for the sale of lands, tenements or
hereditaments, or of any interest therein, except leases for
a term not longer than one year, unless the purchase money,
or a portion thereof is paid and the purchaser is put in
possession of the land by the seller;

(6) Every agreement, contract or promise to make a will or
to devise or bequeath any real or personal property or right,
title or interest therein;

(7) Every agreement or commitment to lend money, delay or
forebear repayment thereof or to modify the provisions of
such an agreement or commitment except for consumer loans
with a principal amount financed less than $25,000;

(8) Notwithstanding Section 7-8-113, every agreement for
the sale or purchase of securities other than through the
facilities of a national stock exchange or of the
over-the-counter securities market.