Question about Encumbered Estates

Michael Reddington (Abt. 1841-1909) Encumbered Estates.jpg

Question:  My Great-grandfather, Michael Reddington (Abt. 1841-1909) was noted as a tenant on this land in 1867.  It says, "Lease dated the 27th day of March, 1867, from Francis A. O'Malley, Esq. to this tenant, for the life of James Reddington".

My Great-Great Grandfather's name was James Reddington. (I have no records for him).  

Can you tell me what "for the life of James Reddington" means?  Does it mean that the tenancy has just been passed to Michael if his father, James, has died?  

I thought the Encumbered Estates Act had something to do with not being able to pay rent during the Great Famine.

Thank you for any clarification you might have!