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Advice Requested on Commercial Lease Situation

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Advice Requested on Commercial Lease Situation

Old 02-13-06, 11:23 AM
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Advice Requested on Commercial Lease Situation

An acquaintance of mine, let's call her Sharon, owns an ethnic grocer in a shopping center. A few years ago, someone, let's call him Bob, bought out the previous owner and installed themselves as the owner of the shopping center and a small general store that sold some groceries. (That's not their main product).

A new lease was signed when the previous one expired with a clause saying that "Tenant will not sell any items or services offered by any other Tenant." About a year goes by, business as usual. Recently, Bob (owner/landlord) starts thinking that his business is in decline because of Sharon's ethnic grocer. He begins accusing her of trying to toe-in on him and that her ethnic grocer is costing him business. So now Bob is constantly over, saying "You can't sell this, you can't sell this etc. etc." even when the products don't have much of anything to do with each other (say, bubble tea mix vs. iced tea mix). Bob even started offering the same exact products (say identical soy sauce that he never stocked), then saying he can do that because he's the owner and he can do whatever he want.

A lawyer is already being contacted because my friend fears the owner will just copycat everything she sells and she'll have no recourse. The new lease expires at the end of this year so I told her to start making alternate plans and she's looking at other locations.

But in the meantime, do you have any suggestions on how to deal with Bob, seeing as how Sharon's business is how she feeds her family?
Old 02-13-06, 11:33 AM
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Not any sort of legal advice.

I'd think, just off the top of my head, to look to whether that specific term was bargained for in the contract, where it specifically was located in the contract, whether your friend was on notice of the additional term, and what details were discussed when it was added into the contract.

I think, that any court would say that renewing the lease of a grocer, and adding that you can't compete with another grocery store the lessor owned would be somewhat suspect at least, to downright unconscionable at best. i think a threatening letter with some valid legal arguments from a lawyer would be enough. You could let the owner sue your friend, as I'm pretty sure most judges and juries would see the silliness of the suit, and she'd probably win on summary judgment.

It just seems pretty crazy to renew the lease of a grocer, and then tell them you can't sell grocery items. I'm pretty sure that most general grocers have a list of items that are pretty common and necessary to any grocery store. Now if your friend owned an Asian grocer, and the owner of the building had a mexican grocer, I could see courts upholding a contract that stated that your friend wouldn't carry any mexican foods at her store.

Last edited by deadlax; 02-13-06 at 11:35 AM.
Old 02-13-06, 05:44 PM
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Originally Posted by deadlax
I think, that any court would say that renewing the lease of a grocer, and adding that you can't compete with another grocery store the lessor owned would be somewhat suspect at least, to downright unconscionable at best. i think a threatening letter with some valid legal arguments from a lawyer would be enough. You could let the owner sue your friend, as I'm pretty sure most judges and juries would see the silliness of the suit, and she'd probably win on summary judgment.
Not legal advice either, but I agree with this. I don't think this kind of clause for an established business would be legit.

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