A business that leases real estate and improvements (buildings, etc.) in the form of space for offices, a warehouse, a restaurant, a nail or hair salon, a clothing store, a coffee shop, or other commercial (nonresidential) space will usually be required to sign a written contract known as a commercial lease agreement.

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 as 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.

The law governing commercial leases varies from state to state but generally consists of a state's contract law (as applied to the lease agreement)—and in some states, includes the statutes enacted by the state's legislature that specifically apply to commercial tenancies, or that generally apply to both residential and commercial tenancies.

In California, a business that leases property for commercial purposes, such as office space, warehouses, or retail locations, will enter into a commercial lease agreement. Unlike residential tenants, commercial tenants are considered more knowledgeable and are expected to understand and negotiate the terms of their leases. California law provides fewer protections for commercial tenants compared to residential tenants, placing the onus on the business to ensure that the lease terms are favorable and do not adversely affect their operations or financial health. The regulation of commercial leases in California is primarily governed by the state's contract law, and while some statutes may specifically address commercial tenancies, the protections are not as extensive as those for residential leases. Therefore, it is highly advisable for a commercial tenant to consult with an attorney to review and negotiate the lease agreement before signing to safeguard their business interests.