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.
News from Dentons
News from The Lawyer
Briefings from Dentons
In some instances, the company should consider a strategy of shifting some of the costs and fees associated with compliance to the party issuing the subpoena.
Independent governance committees will need to be in place by the April 2015 implementation date.
Analysis from The Lawyer
The continent’s boom in natural resources and renewable energy is sparking an infrastructure drive
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.