Are We Exclusive? That Depends on the Words We Use
Exclusive use in a lease is valuable to a big chain or a mom-and-pop. In a recent case, the court held that restrictions on “competition between products among Shops” did not extend beyond the first floor of a student center’s food court without express language that “Shops” included the building’s other floors. This reading crippled a coffee shop’s business when a competitor opened upstairs. The upstairs tenant also received permission from the university to accept campus ID/debit cards for coffee purchases—a perk not granted to the downstairs tenant. Since students were required to have meal plans, they carried spending cash on their cards for food and drinks and often opted to swipe their cards for coffee upstairs. In this coffee war, imprecise wording in the lease proved a costly reminder of the significance of the words we use.
Garth G. Hoyt is a shareholder at McCausland Keen & Buckman, where he practices in the litigation department. For more information on this Bisnow partner, contact Garth at ghoyt@mkbattorneys.com.
The views expressed here do not constitute legal advice; parties to real estate transactions should seek legal counsel.
