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Piggly Wiggly Southern, Inc. v. Heard

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Law Dictionary

Featuring Black's Law Dictionary 2nd Ed.
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Property Law Keyed to Cribbet

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Bloomberg Law

Citation. 22 Ill.261 Ga. 503, 405 S.E.2d 478 (1991)

Brief Fact Summary. This case is based on a lessor’s suit against a lessee of commercial realty, where the lessee discontinued its business prior to ending of the lease term and vacated the premises, but continued to pay the base rent and would not allow the sublease of the premises to another similar business.

Synopsis of Rule of Law. In the absence of any express or implied covenant of continuous operation in the lease, the Court will not substitute such a covenant when the intent of the parties is manifest in the plain language of the contract.

Facts. In 1963 the predecessor to the Appellee (lessor) and the Appellant (lessee) entered into a lease agreement where the lessor agreed to construct a supermarket for the lessee according to the lessee’s plans. The lessee drafted the lease which was to commence in 1964 for a term of 15 years, and called for an annual base rent of $29,053.00 as well as a percentage rent of annual gross sales exceeding $2,000,000. The lease was renewed in 1979 for an additional seven years, with options to renew for two additional three year terms. The lessee exercised both subsequent two year options, and after it was acquired by a new corporation, one month into the second term of three years, closed its store, vacated the premises and moved to a new shopping center belonging to the new corporate owner. The lessee continued to pay the annual base rent under the lease and refused to sublease the premises to another store, despite interest from other supermarkets. The lessor filed suit against the le
ssee for the alleged breach of the lease. The trial court found for the lessor. Lessee appealed.

Issue. Does the lease contain any express or implied covenant of continuous operation such that the lease must terminate when the lessee discontinues its business on the premises?

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