Legal Case Summary
Contract law – Specific performance – Covenants
Facts
The Co-operative Insurance Society granted Argyll a thirty-five-year lease of premises in a shopping centre. A covenant in the lease required Argyll to keep the premises open for retail trade during normal business hours. The premises were used as a supermarket and happened to be the biggest attraction in the shopping centre. Argyll decided to close 27 supermarkets, including this loss-making store. The landlord asked Argyll to keep trading while it sought an assignee and offered to discuss a temporary rent concession. Argyll closed the store, admitted breach and agreed to an order for damages to be assessed. The trial judge refused specific performance. The Court of Appeal reversed that refusal, and Argyll appealed.
Law Teacher writing support
Writing a law essay?
We choose a writer who is an expert in your area of law and qualified to at least the academic level you select. Most of our writers hold a master’s degree or PhD, have teaching experience, or both.
Send us your question and, if you wish, any marking criteria. We’ll write an essay to your instructions.
Issue
Was the Court of Appeal entitled to overturn the trial judge’s discretionary refusal to order Argyll to keep trading?
Decision / Outcome
The House of Lords allowed the appeal and restored the trial judge’s order, leaving damages to be assessed. Lord Hoffmann distinguished an order requiring an ongoing activity from one requiring a defined result. Keeping a supermarket open could lead to repeated court applications about compliance and expose the tenant to contempt proceedings. Compelling Argyll to run a loss-making business could also impose a cost out of proportion to the landlord’s benefit and give the landlord unfair leverage. The trial judge had been entitled to take those considerations into account.
Reported citations: [1997] 2 WLR 898, [1997] 3 All ER 297
