Stine, the owner of an office building, and Mering concluded a three-year leasing agreemen

t in January 2012. Mering would use the first floor to open a restaurant. The annual rental should be paid on the first of each month.

In 2013 Stine and Mering entered into a service agreement, by which Mering would provide meals to the employees of Stine. The service fees would be paid on a quarterly basis.

In June 2014, Mering was declared bankrupt by a court which designated a bankruptcy administrator responsible for the liquidation. The bankruptcy administrator found that Mering had failed to pay the rental for 2014. Stine claimed the rental due for the year of 2014 as his credit and requested to offset the meal service fees for the first and second quarters of 2014. Stine also declared dissolution of the leasing agreement between the two parties.

Required:

In accordance with the Enterprise Bankruptcy Law:

(a) State whether Stine’s request to offset the meal service fees was in conformity with the law. (2 marks)

(b) State how to deal with Stine’s request to dissolve the leasing contract. (2 marks)

(c) State what benefit Stine could have if its request to offset was accepted. (2 marks)