my contract states that i cannot sell go...

Asked by Ebenvg on 27-03-2018 11:39:36
Question posted in the Landlord Tenant Law category relating to Free State
Question value: R 150.00

my contract states that i cannot sell goods in conflict of my landlord. I am renting a garage shop for 14 years and cannot sell airtime , wood and charcoal. I was promised protection in terms that no other take away will be allowed next or close to me because the landlords needed a variety of consumers. The shop is in Welkom and the mining sector took a huge plunge in the past 7 years. I requested to sell airtime because of the Eskom hikes, escalation of rent and wage demands but was refused. In the meantime a debonairs, fish aways was set up next to me that are directly in competition. They (landlords) said that they could not refuses national brand shop to set up there and competition was healthy. 2 months ago i was informed that another ,no name, take away was also opening. The promises of 14 years back is now forgotten, but still i cannot compete with my landlord by selling these products because he is keeping it to himself. It is therefore fair for him, to create all sorts of competition for me in a time where i struggle to pay rent and electricity and salaries. I have applied again about 1 month back to allow me to also sell airtime, wood and charcoal, but no response from them. I have explained that my situation is desperate but he has the monopoly on airtime and wood and charcoal. Me and my workers divert all potensial airtime buyers next door to the cashier at the garage and i see all these customers walk out my shop. My rent is escalating again next month and at this rate will lose my shop and send loyal workers home. I need urgent assistance please. I have explained that i am trying to put 2 sons through university and that i need to compete fairly. Still no response. Yours truly. Eben

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Answer to the Question

Posted by Att. Patrick on 27-03-2018 12:16:59

Hi there Eben and thank you for your question,

If it was part of your original lease agreement that the landlord would not rent out the next door premises to any take away shop, then the landlord has now breached your lease agreement. The breach means that you can either cancel your lease agreement, or you can sue the landlord for damages that you have suffered as a result of the breach.

You probably won't want to close your store, so your only option is to sue your landlord. It should be quite simple to calculate your damages. If, for example, you were making R10k per month before the other take away places opened, and now you're only making R4k per month, then your damages are R6k per month. That's the amount that your landlord will need to pay you for the breach.

But, there are obviously costs involved in taking this matter to court, so you'll need to decide what you want to do. You'll also need to ensure that you have sufficient evidence of your losses. e.g. income statements, or cash flow reports, etc.

There is unfortunately no obligation on your landlord to allow you to sell airtime, wood or charcoal. If you did, then your landlord would argue that you are in breach of your lease agreement. Your landlord would then be able to either cancel your lease (and kick you out) or sue you for damages!

Unfortunately fairness doesn't really come into the world of contract.

You're not really dealing with fairness. You're dealing with breach of contract.

Legally, if your landlord ignores your requests to allow you to sell airtime, wood or charcoal, that does NOT mean that you are allowed to sell those items. His silence is taken as a "no".

I don't know what else to tell you. 

You need to decide whether or not you are going to sue your landlord for your losses. You are also going to need to decide whether or not you are going to sell airtime, wood or charcoal even though it means that you are in breach of the terms of your lease agreement.

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.

Att. Patrick

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Information provided by client

Thanks but that is not what I am looking for. I am not interested to sue anyone. But the law is clear on unfair competition between landlords and tenants. Although his promises to me was oral, and not in writing he is obviously bullying me buy creating competition but not to himself. I have spoken to a lawyer friend who says that the law should protect the small business owner against this big corporate people . so I need advice on where and how I tackle the issue of unfair competition!!

Answer to the Question

Posted by Att. Patrick on 28-03-2018 10:40:31

When you are saying unfair competition, are you referring to the issue of airtime, wood and coal, or the issue of the take away next door?

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