Competition and restrictive covenants in leases
The Central London County Court has held that a user clause proposed in a lease renewal by a local authority landlord which would prohibit the tenant from selling convenience goods and alcohol would breach the prohibition in section 2 of the Competition Act 1998. The landlord failed to demonstrate that the user clause would be exempt from the prohibition.
The facts of this case should be viewed against the backdrop that the Act applied to property contracts from 6 April 2011 and therefore, pursuant to section 2 of the Act, property contracts cannot now:
- Affect trade within the UK; or
- Have as their object or effect the prevention, restriction or distortion of competition within the UK.
The landlord owned and let a parade of shops within a residential area. Each lease restricted the user of the premises to encourage a variety of shops within the parade. On expiry of the lease before the court, the tenant proposed a change to the user covenant which included the ability for it (a newsagent) to sell convenience goods and alcohol. The landlord rejected this proposal and put forward a counter-proposal which included an express clause prohibiting such use…
Click on the link below to read the rest of the Dentons briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Dentons
News from The Lawyer
Briefings from Dentons
The National Association of Insurance Commissioner’s Center for Insurance Policy and Research (CIPR) recently released the findings of its study on telematics-supported usage-based insurance.
Financial Regulatory Developments, 17 April: “Dear CEO” letters; Lending Code reviewed; £126m custody failings fine; and more
Also: compatibility of Solvency 2 with accounting principles; EU supervisory convergence; and more.
Analysis from The Lawyer
Life in Canada is getting harder for firms as commodities prices fall and work volumes slow
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all