Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Exclusive use provisions form the foundation of the economic relationships between tenants and landlords in shopping centers across the United States. Landlords make use of these provisions to obtain the right tenant mix in their shopping centers as well as to demand premium rents from the tenants that desire these economic protections. Tenants desire exclusive use provisions to gain the competitive advantages and protections that such provisions afford to their products and services. With the proliferation of so-called 'big box' retailers in shopping centers and the phenomena of over-retailing in communities throughout the United States, exclusive use provisions are increasingly coming under attack. In Tippecanoe Assocs. II, LLC v. Kimco Lafayette 671, Inc., 829 N.E.2d 512 (Ind. 2005), the Supreme Court of Indiana entered the fray on this issue with a decision that affects the way these provisions should be drafted. This article, through a discussion of the court's decision in Tippecanoe Assocs. II, LLC, describes how exclusive use provisions are coming under attack and practical ways to draft around these issues and to protect landlords and tenants with exclusive use provisions in retail leases.
The Decision in Tippecanoe
What occurred in Tippecanoe Assocs. II, LLC is that the validity of an exclusive use provision was contested on the basis that the provision constituted an unreasonable restraint on trade. An exclusive use provision may be invalidated if it can be shown that the provision prohibits an overbroad type of activity or if the provision is excessively burdensome to one of the parties to the lease or to the public. In Tippecanoe Assocs. II, LLC, Kroger Company ('Kroger') assigned three leases in Tippecanoe County, IN, to Pay-Less Super Markets ('PayLess'). One of the leases (the 'Kroger Lease'), located in the Sagamore Shopping Center (the 'Center'), contained an exclusive use provision that prevented the owner of the Center from leasing space to another grocery store. At the time that PayLess took the assignment of the Kroger Lease, PayLess already operated two other grocery stores within two miles of the Center. PayLess, as the Indiana Supreme Court put it, 'cheerfully conceded' that it had no intention of operating a grocery store in the Center and acquired the lease to exclude competitors from the location. While PayLess did not operate a grocery store in the space formerly occupied by Kroger, PayLess paid rent and subleased the space to an appliance store. In 2000, 18 years after PayLess took the assignment of the space from Kroger, the owner of the Center asked the Indiana courts to declare the restrictive covenant unenforceable because the space was not being operated as a grocery store. This was done to allow the owner of the Center to enter into a lease with another grocery store chain in a large space that had become available.
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?