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I. INTRODUCTION

The world of retail is competitive. Competition for the same customers by established brands, new brick-and-mortar concepts, and the ubiquitous threat of online competition all make it increasingly difficult to maintain a successful, profitable retail business. We all are familiar with the headlines that periodically proclaim the demise of well-known national retail chains. To survive and succeed in this hyper-competitive world, retailers look for every possible advantage. Exclusive use provisions in retail leases provide one such advantage by limiting geographical competition between a tenant and its rivals.

From the retail tenants perspective, exclusive use provisions are a tool to protect its investment and market share in a particular geographical area. Food service retailers in particular, including restaurants and grocery stores, face fierce competition and are constantly looking for ways to survive on thinner and thinner margins. As a result, retailers frequently request and rely upon exclusive use provisions in their leases to effectively eliminate nearby competitors. For example, the owner of a Del Taco franchise would not want to invest in a specific location, only to have a Taco Bell open up next door.

However, from a landlords perspective, exclusive use provisions are an obstacle to filling spaces in a shopping center. Landlords likewise face fierce competition in attracting and retaining in-demand retailers who contribute to the diversity of dining, retail and shopping options and make their center attractive to customers. By granting an exclusive use provision, a landlord restricts its ability to lease to a similar business, even if, in the landlords judgment, the two businesses would complement each other and not diminish each others market share. Exclusive use provisions reduce a landlords profits and may lead to vacancies a result which is harmful to landlords and tenants alike. An exclusive use provision that is not precisely drafted is also likely to lead to disputes between the landlord and the tenant, and may even lead to litigation over whether a new tenant violates the provision.

New retail concepts add another layer of complexity to this equation. Restaurant concepts that seek to blend two or more categories of food potentially run afoul of exclusives granted to existing tenants, particularly if the exclusive was drafted years before a new concept emerged. Food trucks, for example, have become trendy and delicious in the last few years. A restaurateur may not have worried about a food truck parking at the center once a week ten years ago, but now could lose a significant percentage of its lunch traffic to the newest food truck concept that pulled into the parking lot. A previously drafted exclusive use provision may not encompass the food truck, or may be hopelessly ambiguous with regard to this new concept. As

Exclusive Use Provisions: Avoiding Common Pitfalls in Retail Lease Agreements

By Karla Kraft, David Keithly, and Kenneth Hsu

2014 All Rights Reserved.

retailers increasingly seek to provide unique experiences to consumershow about Mexican-Korean fusion, or Thai-Italian fusion for dinner tonight? commonly used terms and existing exclusives become almost certainly vague and difficult to apply.

Bruxie, LLC is a good example of one such concept currently challenging existing definitions. Bruxie is a restaurant that offers gourmet waffle sandwiches. Bruxies menu includes both savory and sweet options that simultaneously inhabit the breakfast, sandwich, and dessert categories. This new concept begs the question: is a Bruxie sandwich a breakfast food, a traditional sandwich, or a dessert? In addition to creating fodder for cocktail party debate, the ambiguity presented by this and other new concepts also presents a unique challenge in drafting and enforcing exclusive use provisions.

Exclusive use negotiations often are reserved for leasing agents. However, in the atmosphere of heightened retail competition and new concepts, counsel should be involved at an early stage in drafting exclusive use provisions, and must be aware of potential pitfalls to insulate their clients from the risks that result from imprecise drafting. Despite their competing interests, retail landlords and tenants can both benefit from more precise exclusive use provisions that specifically detail both parties expectations and eliminate ambiguities that lead to strained relationships, uncertainty, and ultimately disputes and litigation.

II. EXCLUSIVE USE PROVISIONS

A tenant generally has the right to use the leased premises for any lawful purpose without interference from the landlord unless the use is prohibited by law, results in waste or destruction of the premises, or is forbidden by an express or necessarily implied provision of the lease.1 Landlords can expressly restrict a tenants use of the premises in two waysthrough permitted use provisions or through exclusive use provisions.

Permitted use provisions detail for what purpose a tenant may use the leased property in precise terms.2 For example, a landlord leasing a large restaurant space may require that the tenant use and occupy the property only for general food services and dining purposes. This prevents a sudden, unacceptable change in the type of business occupying the space, so that the landlord does not unexpectedly find the restaurant has become, say, a gym or a computer retailer. Use provisions are a first line of defense in allowing landlords to control the mix of retail experiences within their centers.

While permitted use provisions benefit the landlord, exclusive use provisions, or exclusives, benefit the tenant. Exclusives are restrictive covenants of the landlord written into a lease for the benefit of the tenant that prohibit the purposes for

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which the landlord or other tenants may use their leased premises. For example, a landlord may grant a tenant the exclusive right to sell delicatessen or submarine type sandwiches3 or insurance and insurance-related products.4 Such exclusives restrict the landlords ability to rent to future tenants seeking to engage in the activities detailed in the exclusive use provision. Under California law, use restrictions are valid and enforceable so long as they are reasonable.5

There are two categories of violations of exclusives: violations by landlords and violations by other tenants. Landlords have a duty to uphold and enforce exclusive use provisions.6 Thus, if a landlord and a new tenant enter into a lease that breaches an existing tenants exclusive, the landlord is liable to both tenants. Under California law,7 if the landlord is directly at fault for such a breach, it is not entitled to a reasonable opportunity to correct the breach.8 Another tenant can be liable for violating an exclusive if it infringes upon an existing tenants provision. In these cases, the landlord is only indirectly at fault for the breach, and is entitled to reasonable notice and time sufficient to try to correct the breach.9

Courts generally construe exclusive use provisions broadly.10 In addition, the implied covenant of good faith and fair dealing, which is implied in every contract, also applies to exclusive use provisions.11 If a violation is found, remedies for the breach of an exclusive include rent abatement, money damages (including lost profits),12 and excuse from further performance under the lease (including non-payment of rent).13 In determining the amount of any award, the calculation must be based upon unspeculative evidence showing with reasonable certainty both [the] occurrence and extent of the lost profits.14 In addition, California courts may award injunction relief to prevent interference with contractual relations.15 When a landlord attempts to lease to a tenant who will violate an exclusive, the tenant who holds the exclusive may seek injunctive relief.16

III. RECENT CALIFORNIA CASES

California state courts apply general principles of contract interpretation to interpret and enforce exclusive use provisions.17 Thus, if a tenant wishes to prevent a landlord from leasing to a competitor on the grounds of an exclusive use provision, the terms of the provision must clearly restrict the landlord.18 Especially in recent years, courts have continued to rely first upon the plain language of the lease to determine the precise scope of the tenants exclusive right. Pursuant to the parol evidence rule, courts typically refuse to consider oral or written extrinsic evidence to vary, alter, or add to the scope of the provision.19 Even when such extrinsic evidence is considered, the text of the provision remains the focal point for the courts analyses. In sum, cases considering exclusive use provisions are very fact-specific, and closely analyze the language of the provision at issue. An overview of pertinent California case law therefore is helpful.

In City Best Insurance Services, Inc. v. Corona Town Center, LLC,20 for instance, the Court of Appeal for the Fourth Appellate District found a shopping center that leased to an insurer did not breach the express terms of the leases exclusive use provision when another tenant, a supermarket, began subleasing 100 square feet of its space to a competing insurer.

The court focused on the plain language of the provision: [The shopping center] shall not execute and deliver any lease for space in the Project pursuant to which [the center] authorizes the use of the premises demised by said lease primarily for the sale of insurance and insurance-related products (the Exclusive Use).21 The provision also did not apply to any portion of the shopping center the use of which is not controlled by [the center] as of the date of the Lease.22

The court of appeal affirmed the trial courts finding that the supermarkets sublease fell directly within this exception because the center technically did not control the use of the subleased space.23 More specifically, the supermarkets own lease gave it the right to unilaterally sublease any portion of the market (comprising 65,000 square feet or less) for any lawful nonobnoxious retail use without the centers approval.24 Even if the sublease was not covered by the exception, the court further held that the center technically did not execute and deliver a lease, as prohibited by the plain language of the exclusive use provision.25 Further, the court found that the parol evidence rule barred the insurers claim that the center misrepresented that it would have exclusive right to sell insurance within the center.26 The fraud exception to the parol evidence rule, asserted by the insurer, did not apply because the allegedly fraudulent promise was directly at odds with the much more limited exclusive-use provision of the lease.27

The Court of Appeal for the First Appellate District adopted a similar textual approach in Hanna v. ENS Management.28 The court rejected a grocery stores argument that an exclusive use provision requiring its landlord to not lease space to any other convenience or grocery market selling the same products barred the landlord from leasing to a bargain reseller of clothing and household items, even if the reseller sold a large number of products also sold by the grocery store.29 The court first noted substantial evidence that the bargain store did not operate as a convenience or grocery market; the store was listed in its own lease as a Total Clothing/General Merchandise Only store, it generally did not sell food items, and it did not fall within the customary meaning of a convenience or grocery market, as defined by an expert witness.30 The grocery store itself admitted that the bargain store was not a convenience or grocery market, but argued that discussions leading up to the drafting of the provision suggested a broader scope than the plain language suggested, one that included any store that sold competing products.31 Even after finding the trial courts admission of parol evidence proper, the court of appeal rejected this interpretation, holding that the provision expressly prohibited a particular class of businesses (convenience or grocery market[s]) and not just any other business selling some of the same products.32

In Freestyle Martial Arts Corp. v. Soco,33 the Court of Appeal for the Fourth Appellate District applied a textual analysis very similar to that applied in Hanna, but instead ruled against a landlord in determining that it had violated a tenants exclusive right. The complaining tenant was a martial arts company leasing space in a shopping plaza protected by an exclusive use provision stating: [l]andlord will not lease within the subject shopping center to any tenant whose authorized use clause (or portion of same) is described as the operation of a martial arts studio.34 The landlord subsequently agreed to lease another

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space to a kickboxing club, which in its lease described its use for the space as a kickboxing personal defense/fitness facility.35

The court of appeal affirmed the jurys conclusion that the landlord was liable for breach of contract, finding that the jury reasonably inferred that the landlord was aware that kickboxing was a martial art and that the plaintiff s lease granted it an exclusive right to be the only martial arts studio in the shopping plaza.36 As was the case in Hanna, the evidence presented to the jury here included testimony by the landlords manager explicitly admitting that he knew kickboxing was a martial art and thus fell expressly within the provision.37

The furthest a California court has ventured beyond the text of an exclusive use provision was in Garcha v. Central Plaza-Union City, L.P.38 In 2004, the plaintiff bought and began operating a Quiznos sandwich franchise in Building A of a shopping center that also contained a Building B and Building C.39 The lease agreement contained an exclusive use provision detailing that:

Tenant shall have the exclusive right in the Shopping Center to engage in the sale of delicatessen and subma-rine type sandwiches . . . . Excluding existing tenants, Landlord will not lease to similar business such as Blimpies, Subway, etc. Future tenant menus shall not include more than eight percent of their gross sales to be delicatessen or submarine type sandwiches.40

The same year, the landlord agreed to amend a separate leaseinitially for a computer storein Building B to describe the spaces use as caf (food, internet, music).41 Operating as eMocha, the tenant began selling sandwiches similar to those sold at Quiznos, ultimately earning enough revenue from sandwich sales to exceed eight percent of its gross profits.42

The Court of Appeal for the First Appellate District rejected the landlords argument that the exclusive use provision only applied to competing business in Building A of the shopping center, where Quiznos was located, and not Building B, where eMocha was located.43 Like the cases discussed above, the court began its analysis with the plain language of the provision: [t]enant shall have the exclusive right in the Shopping Center.44

However, the court added that the spirit and letter of the provision supported an interpretation that applied to all three buildings.45 Permitting the landlord to lease space to a competitor within the shopping center but in a separate building could still devastate the business of the exclusive right holder, undermining the entire purpose of the provision.46 The court also contemplated practical considerations related to the separate buildingstheir shared address, their physical layout, and their shared useas factors weighing against a narrow construction of the provision.47 Finally, similarly to the Hanna and Freestyle Martial Arts opinions, the court cited an explicit, pre-litigation admission by the landlord that eMocha was violating the Quiznos lease and [eMochas] own lease as evidence of the landlords knowledge of the tenants exclusive right.48

As the four cases described above suggest, courts will focus on the specific language of the provisionat least, most of the time. Even when courts consider evidence extrinsic to the

relevant provisions text, they are steadfast in beginning and ending their analyses with the leases plain language.

IV. DRAFTING CONSIDERATIONS

Although litigation over exclusive use provisions is relatively rare, pre-litigation disputes are much more frequent and take time and resources to resolve, to say nothing of the strain that the dispute imposes upon the landlord-tenant relationship. Case law can help inform counsel on how to best draft such provisions. Exclusives are often the product of lengthy negotiations between landlords and retailers, both of whom have become increasingly sophisticated in understanding the business and legal implications of exclusive rights. Drafting an effective provision that both parties can agree upon involves spotting potential issuesespecially those ripe for litigationand resolving them through further negotiation. Throughout the process of negotiation and drafting, counsel should keep in mind the following considerations.

A. Choosing the Right Tools

The first step in drafting an effective lease that will meet the needs of both tenants and landlords is to choose the right tools. Use provisions and exclusive use provisions can both help to define the contours of acceptable use.

Permitted use provisions define the limits of the retailers permitted use. Thus, with a properly drafted permitted use provision, the owner of a sporting-goods store could not decide to open a donut shop in the same space without the landlords consent. These provisions are a much finer instrument than the exclusive use provisions discussed below, as they only apply to the retail tenant49 and do not affect any other tenants. A use provision alone merely restricts the tenant and does not affect the landlords ability to do as it pleases with other spaces within a center. This gives the landlord ongoing oversight into the retail mix of its center. Moreover, a use provision can be drafted with knowledge of the tenants current business and be tailored accordinglythere is no need to try to predict what new business concepts may come up or what other businesses may try to move into the center.

In contrast, exclusive use provisions grant the retailer an exclusive right to use the space for a defined purpose. These provisions restrict the use of subsequent tenants within a certain area and restrict the landlords right to rent to whomever it wants. Thus, as in Garcha, a restaurant may hold an exclusive right to sell certain kinds of sandwiches. These provisions have an effect that extends beyond the individual tenant. Subject to the language of the exclusive, subsequent tenants in the surrounding area could be restricted by the terms of any existing exclusives. These clauses result in added protection for the holder of the exclusive and less flexibility for the landlord and subsequent tenants.

Thus, while landlords may prefer to control the various uses of their properties through use provisions, tenants may request broader protections. When determining which tool will meet both the landlords and the tenants needs, the retail lease drafter must consider which tools will adequately address the concerns of the parties, and draft the lease accordingly.

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B. Specificity

Exclusives that are litigated in court typically suffer from a lack of specificity. Often, the exclusive in question will grant an exclusive right to a broad category of services or products without specifying what exactly falls under that category. Such undefined or under-defined terms lead to ambiguity. According to California law, any ambiguity in a restriction on use of leased property is construed in favor of unrestricted use.50 In other words, when faced with an ambiguous term in an exclusive use provision, the court will always err on the side of allowing the use of the alleged infringer.

Tenants and landlords can instead avoid strained relationships and litigation by very clearly detailing the scope of the tenants exclusive right. As the recent case law discussed above suggest, courts generally adopt a plain language approach to exclusive use provisions. In City Best, for instance, the court did not find the landlord liable when another tenant subleased to a competitor partly because the landlord technically did not execute or deliver a lease, as prohibited by the provision.

Drafting a detailed exclusive must take into account practical complexities that may arise. The Garcha court refused to limit the scope of the exclusive use provision to only one building of the shopping center because the provision failed to account for the separate buildings entirely. Similarly, in Hanna, despite the tenants parol evidence suggesting otherwise, the text of the provision did not contemplate the possibility of a store that sold the same products as the tenant, but could not be classified as a convenience or grocery market.

Tenants and landlords should especially over-define esoteric or specialized terms, rather than allowing the court to rely on evidence extrinsic to the lease. In Freestyle Martial Arts, the exclusive use provision prohibited leasing to other martial arts studios. Because the term martial arts is not further defined in the provision, the court was forced to rely upon testimony from the landlords manager that he believed that martial arts included kickboxing before finding the landlord liable for breach of contract.

However, even everyday terms can be the subject of litigation. For example, in Winn-Dixie Stores, Inc. v. 99 Cent Stuff-Trail Plaza, LLC,51 the court was left to determine what was meant by a provision granting an exclusive for groceries and carving out a permitted use for competitors so long as the sale of such items did not exceed 500 square feet. The provision did not define groceries and did not specify how square footage was to be calculated. The plaintiffs argued that the 500 square foot limitation included not only fixtures (i.e., the shelves on which groceries were stored) but also the adjacent aisle space.52 The defendants argued that the 500 square foot limitation applied only to the fixtures.53 In its decision, the court used common sense to interpret the undefined terms in the exclusive:

Limiting the amount of sales to just the footprint of the actual fixtures is not a reasonable construction of the clause at issue. Shoppers do not arrive by chop-per, sending ropes down to hoist up their purchases. Shoppers make choices while standing in aisles and the 500 square feet provided for in the leases at issue obvi-

ously contemplates customers viewing and purchas-ing products from such aisles. Thus, on remand, the temporary injunctive relief granted should be revised to make clear that the 500 square foot figure includes fixtures and their proportionate aisle space.54

Relying upon the common sense of the court to define potentially ambiguous terms or clauses in the same way the parties intended, however, may create a result not contemplated by the parties. Thus, to avoid uncertainty in the administration of exclusive use provisions as well as strained relationships, drafters must be specific and should over-define the terms of the agreement. All details must be thought through and thoroughly defined; no meaning or interpretation should be assumed to be obvious.

C. Specific Lists

Another option for drafters is to list the specific products or services that are protected by the exclusive. Rather than granting an exclusive for Mexican food, the lease might grant an exclusive for tacos or burritos. Again, specificity is important in this context as well, and defining terms within the lease can help avoid the problems discussed above. For example, an exclusive that includes burritos may also implicate wraps if the term burrito is not adequately defined. Freestyle Martial Arts would likely have been decided differently if the lease listed specific martial arts covered by the exclusive, including kickboxing.

Likewise, an exclusive might list prohibited parties. Tenants and landlords can protect themselves from litigation by agreeing to a specific list of other parties prohibited from leasing. The City Best court noted that the plaintiff tenant was a longtime direct competitor of Fred Loya Insurance, which subleased within the shopping center. The tenant in Hanna was aware of the existence of direct competitors who could potentially be interested in leasing within its local market. In such instances, drafting an exclusive use provision that lists the tenants direct competitors or other parties intended to be within the provisions scope would be helpful in avoiding litigation altogether.

D. Limiting the Exclusive

To allow more flexibility for the landlord, rather than prohibiting others from occupying an entire category, the exclusive might merely limit the use of restricted categories to a certain percentage of sales, or of floor-space that can be dedicated to different categories. Thus, a coffee-shop may not be the only tenant allowed to sell coffee, but may have an exclusive that limits the amount of coffee that can be sold by its neighbors. These types of limitations allow some protection for the retailer, while at the same time, not completely foreclosing an entire category.

Another way to limit the exclusive is to limit the amount of floor space that may be dedicated to a certain activity. Here, too, specificity is imperative. As in Winn-Dixie, courts have considered the issue of whether a floor space restriction included only the fixtures, or the fixtures along with the adjoining aisle space.55 Thus, a careful drafter will specify whether the restriction applies to linear feet or square feet and will adequately

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define the chosen term.56 When limiting either the percentage of sales or of floor space, drafters should define how to determine sales and how to measure floor space to avoid uncertainty and litigation.

Similarly, an exclusive might be limited by geographical scope. This could be especially useful and important in larger centers with multiple food courts or dining options. An exclusive might be limited to a specific wing or building. For example, in Garcha, the exclusive did not specify a geographic scope, and so the court applied the exclusive to all three buildings. The drafter in that case could have avoided issues if they had specifically limited the geographical scope of the exclusive.

An exclusive might also be limited in duration. When a tenant insists upon the protection of an exclusive, but the landlord does not want to be bound for a lengthy term, the parties may agree to an exclusive for the first few years of the lease, thereby allowing the tenant to gain a foothold, while at the same time limiting the restriction on the landlord.

E. Exceptions

Another way to limit the scope of an exclusive is to carve out express exceptions to its scope. Typically, such exceptions limit the parties or spaces to which it applies. In City Best, for instance, the tenants exclusive right to sell insurance did not apply to any portion of the landlords center the use of which is not controlled by [the landlord]. The court found that another tenants sublease to a competing insurer fell squarely within the exception because the landlord did not control the subleased space. Other common exceptions include the incidental sales exception, the existing tenant exception, the major tenant exception, and the small tenant exception. Parties can also agree to exclude or except specific tenants or spaces from the scope of the exclusive.

F. Remedies

To take some of the guesswork out of exclusive enforcement, the parties can elect specific remedies if the provision is breached. Remedies should clarify both damages and enforcement. Because actual damages may be extremely difficult to calculate, the parties might consider alternatives, such as liquidated damages, rent abatement, buyout options or termination provisions.

G. Best Practices

Finally, because exclusive use provisions are binding upon subsequent tenants, landlords should include the terms of all relevant provisions in all subsequent leases. The landlord should attach the actual exclusive as an addendum or a rider to all future leases. Similarly, a short form memorandum of lease may be recorded to put third parties, including prospective tenants, on notice of the exclusive.

IV. CONCLUSION

Although increasingly sophisticated tenants and new concepts present unique challenges in the negotiation and drafting of exclusive use provisions, diligent corporate counsel can avoid uncertainty by thinking through the various issues that these provisions present and carefully addressing them.

ENDNOTES

1 See Davidson v. Goldstein, 58 Cal. App. 2d Supp. 909, 910 (1943); see also Keating v. Preston, 42 Cal. App. 2d 110, 115 (1940).

2 See TDY Indus. v. San Diego Unified Port Dist., 2006 Cal. App. Unpub. LEXIS 67 (Cal. Ct. App. Jan. 5, 2006).

3 Garcha v. Central Plaza-Union City, L.P., 2009 Cal. App. Unpub. LEXIS 10209 (Cal. Ct. App. Dec. 23, 2009).

4 City Best Ins. Servs., Inc. v. Corona Town Ctr., LLC, 2012 Cal. App. Unpub. LEXIS 8625 (Cal. Ct. App. Nov. 28, 2012).

5 Pay n Pak Stores v. Superior Court, 210 Cal. App. 3d 1404, 1410 (1989); see also Carter v. Adler, 138 Cal. App. 2d 63, 70 (1955) (A restrictive covenant, such as the grant of the exclusive mercantile rights to respondents, is not merely ornamental words, inserted to please the eye. It is a living expression of the grantor incorporated in a lease as a consid-eration for the lessees faithful performance.).

6 Hildebrand v. Stonecrest Corp., 174 Cal. App. 2d 158, 164 (1959) ([The landlord cannot] abrogate [the] obligation, or excuse itself from performance of [the] duty by seeking to delegate its performance to others, especially to the very persons from whose competition [the] promise was made for the protection of the plaintiffs.).

7 These legal defaults only take effect if the contract does not directly address these situations.

8 Kulawitz v. Pacific Woodenware & Paper Co., 25 Cal. 2d 664, 673 (1944) (stating that where the landlord is directly at fault, the contention that notice and reasonable oppor-tunity to comply with the terms of the covenant are neces-sary to put the lessor in default, has been rejected).

9 Id. (stating that where the landlord is only indirectly at fault, he is entitled to reasonable notice and time sufficient

David Keithly is an associate at Stradling Yocca Carlson & Rauth. His practice focuses on business litigation, securities litigation, real estate disputes, and regulatory compliance matters.

Karla Kraft is a shareholder at Stradling Yocca Carlson & Rauth. Her practice focuses on liti-gation, with a specific emphasis on real estate disputes, class action defense, business disputes, and employment matters. Karla was recently named one of Orange County's top attorneys for the third year in a row, and serves on a number of professional, educational, and non-profit boards.

Kenneth Hsu was a summer associate at Stradling Yocca Carlson & Rauth in 2014. He is currently attending UC Hastings College of the Law and will be joining Stradlings busi-ness and securities litigation practices in 2015.

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to enable it to acquire knowledge of the facts, to ascertain whether the condition could be corrected, and if possible to prevent a continued breach).

10 See Edmonds of Fresno v. MacDonald Grp., Ltd., 171 Cal. App. 3d 598, 605 (1985) (holding that the general rule that restrictive covenants are strictly construed does not apply to exclusive use provisions in a commercial lease).

11 See id. at 607.12 Freestyle Martial Arts Corp. v. Soco, 2007 Cal. App. Unpub.

LEXIS 8925 (Cal. Ct. App. Nov. 2, 2007).13 Medico-Dental Bldg. Co. of L.A. v. Horton & Converse, 21

Cal. 2d 411 (1942) (noting that the restrictive use must be vital to [the tenants] successful operation of its business under the circumstances which prevailed).

14 Sanchez-Corea v. Bank of Am., 38 Cal. 3d 892, 907 (1985).15 See, e.g., Sunbeam Corp. v. Payless Drug Stores, 113 F. Supp.

31, 47 (N.D. Cal. 1953) (Injunctive relief may be had to restrain third persons from unlawfully inducing the breach of a lawful contract by one of the parties thereto when it will result in irreparable injury to the other.); Pac. Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal. 3d 1118, 1130 n.9 (1990) (Injunctive relief is available to restrain unjustified interference with contractual relations when damages would not afford an adequate remedy.).

16 See, e.g., In re Chestnut Ridge Plaza Assocs., 156 B.R. 477, 485 (W.D. Pa. 1993) (shopping center tenant could seek injunctive relief against a prospective tenant to the extent the new tenancy would interfere with the existing tenants right to be the only supermarket in the shopping center); Park Ave. BBQ & Grille of Wellington, Inc. v. Coaches Corner, Inc., 746 So. 2d 480, 483 (Fla. Dist. Ct. App. 1999) (affirming injunction against restaurant that sought to televise sport-ing events in violation of an exclusive right in a sports bars lease agreement); Wons Cards, Inc. v. Samsondale/Haverstraw Equities, Ltd., 165 A.D.2d 157, 162 (N.Y. App. Div. 1991) (third-party tenant could be enjoined from selling greeting cards where it had actual or constructive knowledge of an exclusive use covenant in the plaintiff s lease).

17 Pay N Pak Stores, Inc. v. Superior Court, 210 Cal. App. 3d 1404, 1411 (1989); see also Deutsch v. Phillips Petroleum Co., 56 Cal. App. 3d 586, 590 (1976); Bates v. Indus. Prop. Holding Co., 155 Cal. App. 2d 697, 700 (1957).

18 See Carr v. King, 24 Cal. App. 713, 72223 (1914) (although landlord could not lease to a competitor of the tenant, landlord was allowed to sell to a competitor). But see Hudson Oil Co., Inc. v. Shortstop, 111 Cal. App. 3d 488, 497 (1980) (enforcing restrictive covenant against the buyer of a property who was aware of restrictive use provision).

19 See Cal. Civ. Code 185620 2012 Cal. App. Unpub. LEXIS 8625 (Cal. Ct. App. Nov.

28, 2012).21 Id. at *4 (emphasis added).22 Id. (emphasis added).23 Id. at *911.24 Id. at *9.25 Id. at *8.26 Id. at *12.27 Id.28 2011 Cal. App. Unpub. LEXIS 6549 (Cal. Ct. App. Aug.

29, 2011).29 Id. at *45 (emphasis added).30 Id. at *67.31 Id. at *78. 32 Id. at *13.33 2007 Cal. App. Unpub. LEXIS 8925 (Cal. Ct. App. Nov. 2,

2007).34 Id. at *2 (emphasis added).35 Id. at *56.36 Id. at *1332 (citing Sanchez-Corea v. Bank of Am., 38 Cal.

3d 892, 907) (1985)) (affirming the jurys verdict awarding Freestyle $522,645 in damages based on a lost profits cal-culation, which the court ruled must be based on unspecu-lative evidence showing with reasonable certainty both their occurrence and extent thereof).

37 Id. at *17.38 2009 Cal. App. Unpub. LEXIS 10209 (Cal. Ct. App. Dec.

23, 2009).39 Id. at *23.40 Id. at *34 (emphasis added). 41 Id. at *4.42 Id.43 Id. at *22.44 Id. at *19.45 Id. at *16.46 Id.47 Id. at *18.48 Id. at *19.49 These provisions also necessarily limit the rights of subles-

sees.50 Cal. Civ. Code 1997.220.51 811 So. 2d 719, 722 (Fla. Dist. Ct. App. 2002).52 Id.53 Id.54 Id.55 See id.56 See Super Fresh/Sav-A-Center, Inc. v. Ashy-Bickham Baker,

655 So. 2d 531, 535 n.* (La. Ct. App. 1995) (lease expressly provided the square footage calculation was exclusive of any adjacent aisle space).