Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 3

Lucy Dunworth, developer of a shopping mall, entered into an easement and operating agreement with three major department stores. One of the covenants in the agreement was that each occupant promised to operate its store area as a first-class department store under its trade name for a twenty-year period. The occupants each purchased their commercial space in fee (that is, they actually purchased the land) from the developer. Kaufman-Straus Company, one of the tenants, sold its place to a discount store two years later. The other two first-class department stores brought an action against the discount store because it was not a first-class operation. What is the result? [Net Realty Holding Trust v. Franconia Properties, Inc., 544 F. Supp. 759 (E.D. Va. 1982).]