Use Clause Didn't Require Grocery Tenant to Operate Continuously

A grocery store was the anchor tenant in a Texas strip mall. Its lease said the tenant “shall use and occupy” the space to run a grocery store and required the tenant to pay percentage rent. The tenant moved out of the space, but continued to pay its rent and renewed its lease. The owner sued the tenant for violating the lease, arguing that the use clause required the tenant to operate continuously.

A federal appeals court ruled that the lease's use clause didn't require the tenant to operate continuously. The court noted that the lease didn't have a continuous operations clause. The court rejected the owner's argument that the lease's use clause required the tenant to operate a grocery store continuously. Rather, the use clause merely restricted the purposes for which the space could be used, the court reasoned. The fact that the tenant was required to pay percentage rent would be relevant if the owner had argued that the tenant had an implied duty to operate continuously, but it didn't make that argument, the court added [Daniel G. Kamin Kilgore Enterprises v. Brookshire Grocery Co.].