A lease provision that prohibits the landlord from leasing other spaces in the property to tenants who compete directly with your business. It protects your ability to operate without direct competition within the same building or shopping center.
Exclusive use clauses restrict the landlord from leasing to businesses that offer goods or services substantially similar to those of the protected tenant. The clause must be drafted with precision, defining the protected use narrowly enough to be enforceable but broadly enough to prevent meaningful competition. Remedies for violation typically include rent reduction (often to percentage rent only), injunctive relief, or lease termination. Courts evaluate enforceability based on specificity, reasonableness, and whether the restriction creates an unreasonable restraint on trade.
A landlord leases adjacent space to a competitor offering nearly identical services, arguing the exclusive use clause only covers the exact product category named in the lease and not the broader business type the tenant operates.
Draft your exclusive use clause to cover your business category broadly, not just specific product names. Include remedies for violation (reduced rent, termination right) and specify that the restriction applies to all current and future tenants in the property.
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
