Stop & Shop, Inc. v. Ganem

200 N.E.2d 248 (1964)

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Stop & Shop, Inc. v. Ganem

Supreme Judicial Court of Massachusetts
200 N.E.2d 248 (1964)

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Facts

Ganem (defendant) leased commercial space to Stop & Shop, Inc. (Stop & Shop) (plaintiff). The lease provided that Stop & Shop would pay a set rental fee. Stop & Shop also agreed to pay a percentage of sales, but only if total sales exceeded a set figure. The lease did not require the property to be used for any specific purpose. The lease did not prohibit Stop & Shop from opening competitive businesses in other locations. The lease did require Stop & Shop to maintain accurate accounting of its sales and to provide those to an accountant each year. When Stop & Shop entered into the lease, it was operating a grocery store chain, which was known to Ganem. The commercial space had previously been leased for the purposes of operating a grocery store. After entering into the lease, Stop & Shop opened two grocery stores that competed with the location at issue. Stop & Shop later decided to close its grocery store at the location at issue, but otherwise intended to comply with the terms of the lease. Stop & Shop filed suit for declaratory relief. Ganem filed a counterclaim, seeking to require Stop & Shop to operate a grocery store at the location at issue and to have Stop & Shop pay Ganem a percentage of sales from all of its grocery store locations. The trial court granted Stop & Shop’s demurrer as to Ganem’s counterclaim, dismissing it. The trial court ruled that Stop & Shop was not required to use the property for any particular purpose and was not required to continue operating the grocery store at the property at issue. Ganem filed an interlocutory appeal. The appeals court sustained the trial court’s decision on Ganem’s counterclaim. Ganem appealed to the Supreme Judicial Court.

Rule of Law

Issue

Holding and Reasoning (Whittemore, J.)

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