The tenant (the business occupying the space) who signs a commercial lease agreement is generally expected to be a more savvy, sophisticated, and informed tenant (also known as a lessee) than a tenant in a residential lease, and the law usually does not provide a commercial tenant with the same protections as residential tenant receives.

Because the law does not provide a commercial tenant with many protections, it is up to the commercial tenant to read, understand, and negotiate protections in a proposed lease agreement before signing it, as most every paragraph in a commercial lease agreement can have a significant impact on a business’s operations and financial stability.

Laws vary from state to state, but a commercial landlord’s ability to shut off a tenant’s utilities is usually determined by the terms of the lease agreement and the state’s contract law—to determine, for example, if any breach of the lease agreement by the tenant was a material breach that might justify an extreme measure such as shutting off the utilities.

Contract law in most states recognizes an implied duty of good faith and fair dealing between parties to a contract, and a commercial landlord who shuts off a tenant’s utilities because the tenant is a few days late paying the rent may be in breach of the landlord’s implied duty of good faith and fair dealing.

In Tennessee, commercial tenants are presumed to be more knowledgeable and capable than residential tenants, and thus, they are afforded fewer legal protections under the law. Commercial tenants are responsible for thoroughly reviewing and negotiating the terms of their lease agreements to secure their own protections, as commercial leases can significantly affect their business operations and financial health. The lease agreement typically dictates the circumstances under which a commercial landlord may shut off utilities, and this is influenced by Tennessee's contract law. While specific actions such as utility shutoff are governed by the lease, Tennessee law also recognizes an implied duty of good faith and fair dealing in contractual relationships. A landlord who prematurely or unjustifiably shuts off utilities may be found to have breached this duty, even if the tenant is late on rent. It is crucial for commercial tenants to understand their lease terms and the implications of Tennessee's contract law to navigate their rights and obligations effectively.