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Walgreen Co. v. Sara Creek Property Co.

United States Court of Appeals, Seventh Circuit
966 F.2d 273 (1992)



In 1971, Walgreen Co. (Walgreen) (plaintiff) signed a lease with Sara Creek Property Co. (Sara) to occupy a space in the Southgate Mall in Milwaukee. Sara owned the mall. In a clause in the lease, Sara promised not to lease space in the mall to any other company seeking to operate a pharmacy or a store containing a pharmacy. In 1990, Sara’s largest tenant in the mall faced bankruptcy, and Sara informed Walgreen it was buying out the tenant and replacing it with a Phar-Mor store. Phar-Mor is a “deep discount” chain that contains a pharmacy the same size as the Walgreen pharmacy. Walgreen filed an action for breach of contract against Sara and Phar-Mor and asked for an injunction against Sara’s lease of the space to Phar-Mor. The trial court granted a permanent injunction in favor of Walgreen. The trial court rejected Sara’s argument that Walgreen failed to demonstrate that damages could be readily estimated and would be an adequate remedy. Walgreen countered with evidence that its damages would be very difficult to compute since they include intangible damages such as loss of good will. After considering all the evidence, the trial court held that the cost of damages would exceed the cost of an injunction, and granted a permanent injunction for Walgreen. Sara appealed.

Rule of Law


Holding and Reasoning (Posner, C.J.)

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