Exclusive right - breach of contract

[everythinghelpsus]

What is the name of your state? New Jersey

We have a clause in our lease giving us exclusive rights for selling juices & smoothies, 9 months ago a restaurant opened next door and started selling these items. We noticed this a few weeks in, we informed the landlord, but they never really stopped. About 4 weeks after they were told to stop, we ordered smoothies for delivery so we can prove it. Then in September they started expanding selling more juices, purchasing machines & advertising. We also purchased juices a few times and can prove. We info informed the LL again, but nothing has been done.

Five weeks ago, we emailed the LL to talk about compensation for breach of contract, and there's been no response. We called the lawyer who negotiated our lease, he's waiting for us to proceed. In the lease there is nothing clearly stating what the penalty would be just that we have exclusive rights. Before we begin the process, I would like to have an understating as to what might be a standard penalty in this matter? What might we be able to negotiate directly with the LL, before getting the lawyer involved? When this first happened, posted on a different message board, did receive responses of a $50 per day penalty. Does this sound standard? We do have the good guy clause to break the lease with 3 months notice, but since there has been a breach of contract , could we not just leave when we wish now?

We have emails showing our initial contact with the LL and his responses that he would take care of this. Recipes from deliveries and friends purchasing directly from the restaurant. We have had a drop in business verse last year which we can prove as well.
Appreciate any advice we might be able to use.

 

[quincy]

What is the name of your state? New Jersey

We have a clause in our lease giving us exclusive rights for selling juices & smoothies, 9 months ago a restaurant opened next door and started selling these items. We noticed this a few weeks in, we informed the landlord, but they never really stopped. About 4 weeks after they were told to stop, we ordered smoothies for delivery so we can prove it. Then in September they started expanding selling more juices, purchasing machines & advertising. We also purchased juices a few times and can prove. We info informed the LL again, but nothing has been done.

Five weeks ago, we emailed the LL to talk about compensation for breach of contract, and there's been no response. We called the lawyer who negotiated our lease, he's waiting for us to proceed. In the lease there is nothing clearly stating what the penalty would be just that we have exclusive rights. Before we begin the process, I would like to have an understating as to what might be a standard penalty in this matter? What might we be able to negotiate directly with the LL, before getting the lawyer involved? When this first happened, posted on a different message board, did receive responses of a $50 per day penalty. Does this sound standard? We do have the good guy clause to break the lease with 3 months notice, but since there has been a breach of contract , could we not just leave when we wish now?

We have emails showing our initial contact with the LL and his responses that he would take care of this. Recipes from deliveries and friends purchasing directly from the restaurant. We have had a drop in business verse last year which we can prove as well.
Appreciate any advice we might be able to use.

Does your business ONLY sell juices and smoothies?

A landlord in a lease to Starbucks, for example, can guarantee no other coffee shops can operate in his landlord-controlled area but excluded would be restaurants that offer beverages, one of which is coffee.

 

[everythinghelpsus]

We are a Juice bar that also sells Smoothie bowls, wheatgrass shot, oatmeal etc.

 

[quincy]

We are a Juice bar that also sells Smoothie bowls, wheatgrass shot, oatmeal etc.

Okay. And the landlord has leased to no other juice bars, correct?

The exact terms of your lease would need a personal review to see if there is a breach in the lease but I doubt you can argue successfully that a lease to a full-menu restaurant that happens to sell juices and smoothies would be a breach on your exclusive rights to sell juices and smoothies at your juice bar.

 

[PayrollHRGuy]

We called the lawyer who negotiated our lease, he's waiting for us to proceed.

Tell him to proceed.

 

[zddoodah]

We have a clause in our lease giving us exclusive rights for selling juices & smoothies, 9 months ago a restaurant opened next door and started selling these items.

I assume "we" refers to the owners of the juice bar. I also assume your landlord is also this restaurant's landlord. Correct?

We noticed this a few weeks in, we informed the landlord, but they never really stopped.

What does "never really stopped" mean?

Before we begin the process, I would like to have an understating as to what might be a standard penalty in this matter?

There isn't one. "Penalties" are for crimes. If you believe your landlord breached your contract, you may be entitled to damages. What are your damages?

What might we be able to negotiate directly with the LL, before getting the lawyer involved?

No one here will have any conceivable way of knowing what you (a group of people we don't know) might be able to negotiate with your landlord (a person/entity we don't know).

When this first happened, posted on a different message board, did receive responses of a $50 per day penalty. Does this sound standard?

No. It sounds like someone who doesn't understand the law simply picked a number out of thin air.

We do have the good guy clause to break the lease with 3 months notice, but since there has been a breach of contract , could we not just leave when we wish now?

A breach by your landlord does not necessarily give you the right to terminate the lease.

I'd suggest at least conferring with a local attorney.

 

[quincy]

What is the name of your state? New Jersey
... We have had a drop in business verse last year which we can prove as well. ...

Covid-19 has been the reason behind a drop in revenue for many businesses. Smaller businesses that have been able to adapt to the changing needs of the public have been best able to survive. Some changes have included drive up services or takeout services or delivery options.

In other words, your drop in business may have nothing at all to do with the restaurant and more to do with your type of business, and what you can offer the public beyond great juices.

Because you have the attorney who drafted your lease looking into the matter for you, that attorney will be a better source of information for you than an Internet forum.

Good luck.

 

[adjusterjack]

In the lease there is nothing clearly stating what the penalty would be just that we have exclusive rights. Before we begin the process, I would like to have an understating as to what might be a standard penalty in this matter?

It's not a penalty, it's damages. Your damages would be a provable loss of income that you suffered due to the presence of the competitor selling the same products.

What might we be able to negotiate directly with the LL, before getting the lawyer involved?

Well, your LL is already ignoring you and is likely to keep on ignoring you until you demonstrate that you are willing and able to file suit.

We have had a drop in business verse last year which we can prove as well.

OK.

 

[Zigner]

I'm not clear about this: Is your LL also the LL of the new business that moved in?

 

[quincy]

... Your damages would be a provable loss of income that you suffered due to the presence of the competitor selling the same products. ...

This is key. Even if a loss of revenue can be shown, the loss must be directly tied to the restaurant’s sale of similar beverages.