Irish Cases

Enforcement of Restrictive Covenant in Retail Lease – the 'Price' of Doing Business

Retail landlord and tenants, particularly those occupying shopping centres and retail parks, will be interested in the outcome of Dunnes Stores Unlimited Company & Anor v Dafora Unlimited & Ors [2] where the defendant was unsuccessful in its appeal against the High Court's decision to enforce a restrictive covenant in a lease preventing the sale of certain 'food, food products or groceries'.

The case is good news for landlords and anchor tenants as it illustrates that exclusivities and restrictive covenants in leases will be enforced by the courts. For tenants, the case emphasises the importance of careful drafting of restrictive covenants and defined terms in retail leases given the significant implications for tenants on what they can and cannot sell where another tenant (usually an anchor tenant) benefits from an exclusivity in relation to the sale of certain products which is