radius clause

radius clause

A shopping center lease clause that prevents a tenant from opening another store within a certain radius of the current shopping center.The purpose is to prevent a competitor from duplicating the landlord's tenant mix in a nearby mall.In the drawing,a 5-mile radius clause would not prohibit the second store, even though they probably have overlapping market areas.Most courts require the restriction to be reasonable in duration and geographical area in order to be enforceable. Contrast with reverse radius clause.

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The radius clause protects the sales in the center by preventing tenants from opening a similar business within three to five miles of the center.
Historically, there has been competitive tension between Biltmore and Scottsdale Fashion and there have been numerous radius clauses imposed by both landlords.
Dempsey said the state can't place restrictions on radius clauses in contracts negotiated between casinos and booking agents.