Facts

[A. AG] (the tenant) rented a retail store and an apartment from [B.] (the landlord). The lease agreements were concluded for a fixed term of 5 years and contained provisions for tacit renewal for another 5 years, as well as an option right for the tenant to extend the contract by 5 years after the expiration of the fixed contract term. The tenant exercised this option right. In 2013, the tenant asserted a renewed option right for both rental properties and requested a reduction in the rents as of July 1, 2014. The landlord then terminated the lease for the retail store. The tenant filed a lawsuit to have the termination revoked and the rents reduced.

Considerations

1. The Federal Supreme Court decided that the contract only provided for a one-time option right, which the tenant had already exercised. A repeated option right was not agreed upon. 2. Regarding the reduction of the rents, the Federal Supreme Court stated the following: - In the case of an indexed lease agreement with a fixed contract term of at least 5 years, an adjustment of the rent during the contract term is only possible due to index fluctuations (Art. 269b and 270c CO). - If the contract is tacitly extended after the expiration of the fixed contract term, the indexation lapses, unless the landlord is also bound for 5 years in the subsequent period. - In this case, the parties can demand an adjustment of the rent…