## Facts

- Keydata Corporation leased space in a Cambridge, Massachusetts building owned by Wyman Street Trust and operated a computer room with installed air-conditioning and other tenant improvements.
- NASA, through the General Services Administration (GSA), negotiated to lease Keydata’s computer room (2,093 square feet) from Wyman, while Keydata planned to move elsewhere.
- Two lease amendments (executed March 11, 1968) provided that Keydata would surrender the computer room and the Government would lease it on October 1, 1968 or a mutually agreeable date between August 1, 1968 and January 1, 1969.
- The Government agreed to pay Wyman $39,000 for specified improvements, and Wyman agreed to pay that same amount to Keydata.
- The parties selected January 1, 1969 as the commencement date, but Keydata did not vacate by that date.
- On January 2, 1969, GSA notified Keydata that the Government cancelled the proposed acquisition provided for in the amendment.
- The Government refused to pay the $39,000; Wyman did not pursue the claim against the Government.
- In state-court litigation, Wyman’s claim against the United States was assigned to Keydata by court order; Keydata then sued the United States as assignee in the Court of Claims.
- The parties filed cross-motions for summary judgment.

## Issues

1. Whether a court-ordered assignment of a landlord’s claim against the United States to a tenant is barred by the Assignment of Claims Act.
2. Under federal law governing federal leases, whether the landlord’s duty at commencement is satisfied by tendering the legal right to possession or requires delivery of actual physical possession.
3. If actual possession is required and the premises are not vacant on the commencement date, whether the Government may rescind/cancel and refuse payment tied to the lease transaction.
4. Whether the Government’s conduct before the commencement date waived strict compliance with the vacancy date or estopped the Government from rescinding.

## Decision

- The court held the assignment to Keydata did not violate the Assignment of Claims Act, and Keydata could sue as assignee.
- The court adopted, as a matter of federal law, the “English rule” requiring a landlord to deliver actual possession at the lease commencement.
- Applying that rule, the court held the Government’s rescission/cancellation was prima facie lawful because the premises were not available for occupancy on January 1, 1969.
- The court denied summary judgment on Keydata’s waiver/estoppel theory and remanded for factfinding on the Government’s communications and conduct.

## Legal Principles

- A court-ordered assignment transferring a claim to the beneficial owner is not barred by the Assignment of Claims Act when it does not create risks the statute targets, such as multiple claimants or double liability.
- Federal law governs the United States’ lease transactions as federal contracts; state landlord-tenant rules are not controlling where a federal standard is applied.
- Under the federal “English rule” adopted by the court, a landlord must deliver actual possession (not merely the right to possession) at the start of the lease term.
- Failure to deliver actual possession at commencement renders the lease voidable by the incoming tenant (including the Government), permitting rescission/termination.
- Waiver and estoppel may limit the Government’s ability to enforce a commencement condition, but such defenses typically require specific proof of conduct, reliance, and disputed facts not suitable for resolution on summary judgment.

## Conclusion

The Court of Claims permitted Keydata to proceed as assignee, established that federal leases require delivery of actual possession under the English rule, upheld the Government’s rescission as legally justified when the space was not vacant, and remanded for factual determination of whether the Government waived the deadline or was estopped from rescinding.


Keydata Corp. v. United States, 504 F.2d 1115 (Ct. Cl. 1974)