Groceries And Other Definitions Revisited

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Groceries, sandwiches, ice cream, supermarkets, restaurants, department stores, variety stores – oh, the words we use, what do they mean? Today, we revisit one of our most-read blog postings because a federal appeals court revisited the underlying case (again). We’re “talking” about the Winn-Dixie case. Our “take” on that underlying case can be read by clicking: HERE. Ruminations urges readers to refresh their memories now by re-reading our earlier blog posting

Winn-Dixie, a supermarket chain, won a court decision in Florida where the lower court ruled that “groceries” included soup, aluminum foil, and similar items. As a result, it ruled that dozens of “dollar” type stores run by three retailers were in violation of a provision in the supermarket’s lease prohibiting others from selling groceries. Basically, the federal court that first heard the lawsuit looked at an earlier state court ruling, and (kind of properly) treated it as binding on itself, the federal court. [Read more…]

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Grammar And Optical Illusions

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Ruminations has never really figured out when to use “which” and when to use “that.” No matter how many times we read that one is used with dependent clauses and the other is used with independent clauses, the rule never sinks in. We don’t even remember which is used with which. To us, it seems like the optical illusion of a hollow mask where you see either a convex face or a concave face depending on who knows what. Small comfort to us that we think we are in good company in this failing. [To learn more about the hollow mask, click: HERE.]

So, does this have anything to do with legal matters? We think so based on a recent decision out of the Delaware Chancery Court, one pitting lawyers from a pair of top drawer Delaware and Washington DC firms against a similar pair of top draw firms from Delaware and Washington DC. And, like many other disputes we’ve read about in judicial decisions, we just wonder: “How do some of us keep a straight face when making some of these arguments?” [Read more…]

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How Can I Get Out Of My Oral Agreement?

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It’s not true that oral contracts aren’t worth the paper they’re printed on. In fact, for all but some small classes of agreements, oral ones are no different than ones printed on the finest of rag papers. Certainly, they are more difficult to prove their very existence, let alone their detailed provisions. That’s a good reason they should be memorialized in a written version. We’ve written, “memorialized” because, in many cases that’s the real function the writing performs. The parties will have already agreed to the terms of their intended transaction. At that stage, they have a contract – a binding agreement. Writing it down doesn’t make it any more “official,” just a lot easier to follow and a lot easier to explain the “deal” to others, attorneys included.

So as not to mislead some readers, we aren’t dismissing the “Statute of Frauds,” something most (perhaps all) states adopted based on a 1677 English law with the self-explanatory name: “An Act for the Prevention of Frauds and Perjuries.” While various states have different lists of what kind of agreements need to be in writing lest one party or the other be able to disavow their agreement just because it was oral (and for no other disabling reason), traditionally most agreements involving conveyances of real property fall or fell (depending on where the property is located) under these statutes. [Read more…]

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Can A Tenant Just Pay-Up And Close Its Store In Violation Of A Continuous Operating Covenant?

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Continuous operation lease provisions are contentious. The ability of a landlord to impose such an obligation within a particular lease is determined by the relative bargaining power of the parties. All bargaining power, like all politics, is local. If a tenant doesn’t really “need” to be at a particular property and the landlord really “needs” that (or any) tenant, then it’s unlikely that any resulting lease will include one. At least, in a rational world, that’s the way it would be.

Today, Ruminations will describe two unusual court decisions with the caveat that the fat lady hasn’t yet sung. Each are at the “preliminary injunction” stage, actually at the stage where two courts, in geographically distant jurisdictions, have ordered two different tenants, with different landlords, to keep their stores open. That’s where the similarity ends, as today’s blog posting will tell.

[As to the two cases, each being in the preliminary injunction stage, no final decision has been reached. All the separate courts have ruled is that what the tenants were “doing yesterday,” i.e., operating a store, they need to do “today,” i.e., keep operating that store (at least until a final decision is reached). That means not all the facts and legal arguments are yet on the table. For that reason, Ruminations won’t be analyzing the living daylights out of either case. We’ll be waiting for a final “call” as to one of those cases (the Indiana one) before going down that road.] [Read more…]

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Stop Them Now – They Are Killing Me!

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  • Until about a month ago (or, perhaps until this past September), had you asked us if a court would order a tenant to keep its store open and operating, we would have said, “Probably, not,” with an emphasis on the “Not.” We think a large majority of our colleagues would have agreed. That’s not to say that there couldn’t have been very special circumstances not included within our “Not,” but we would have thought those circumstances would need to have been unique in character. Today, after an Indiana court has (for now) barred a chain store retailer from closing 77 stores located in the aggrieved developer’s malls and a Washington state court has (for now) barred a (chain) supermarket from closing a single store, we’re far less sure. We aren’t going to dissect those two court orders today. That’s for next week, another holiday weekend. Today, we’ll just glaze eyes over with some legal background. [Read more…]
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Whose Deal Is It Anyway – Ours Or Our Client’s?

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In a perfect world, wouldn’t everyone’s lease or other agreement comments on behalf of the same party be identical (grammar and spelling aside)? Shouldn’t everyone working on behalf of a tenant, landlord, borrower, lender or the like know exactly what her or his “client” wants to see in the agreement? We suppose so, but a perfect world is still pretty far away. And, it isn’t a lack of knowledge (perfect knowledge?) that would result in different agreements for the same client and circumstances if negotiation were done by different people. There are a lot of factors. One factor is that for a lot of good reasons that sound much like “time and money” each negotiator would have her or his own impression as to what that particular client wants or needs. Another is that, for many parts of an agreement, it doesn’t matter – “six of one; a half dozen of another. But, the one that stands out to Ruminations is that those doing the negotiating will actually be substituting their own judgment for that of the party they represent. [Read more…]

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Landlords, Beware The Naked Assignment

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It’s been a while since we’ve pointed out that, using the words employed by a California court in 2001, “[a] lease of real property is both a conveyance of an estate in land (a leasehold) and a contract. It gives rise to two sets of rights and obligations – those arising by virtue of the transfer of an estate in land to the tenant (privity of estate), and those existing by virtue of the parties’ express agreements in the lease (privity of contract).”

Should anyone care? Yes. And, here’s an example that should concern some landlords and benefit some tenants. It deals with a lease assignment.

We’ll lift the words used by two other California courts to explain two different paths by which an assignee takes on liability as the “tenant.” The first is from 1983 and the second from 1937: [Read more…]

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Do It Perfectly And Still Get Sued

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Isn’t perfect better that good? In a perfect world, it might be. But, in our own, perfection may be flawed. We’re not thinking about the incremental cost of going from good enough to perfect. We’re not talking about the impossibility of achieving perfection (points beyond which being unattainable, because there is nothing more perfect than perfect). We’re not talking about different views as to what constitutes “perfect.” We’re talking about cutting disputes short when one chooses practicality over perfection.

We’re going to illustrate our view by way of a September 20, 2017 court decision dealing with interpreting an insurance policy. Insurance-adverse readers, don’t tune out at this point. This is not about insurance. It is about drafting and language. [Read more…]

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