643 A.2d 642 (Super. Ct. App. Div. 1994)
Plaintiff corporation closed one of its supermarket's in the downtown area, and sold the property to a merchant, who then sold the property to defendant city. Defendant then leased the property to another company that operated a supermarket at the location in violation of a covenant prohibiting the operation of a supermarket at that location contained in the contract of sale from plaintiff.
- The court affirmed the judgment which held that plaintiff's covenant adversely impacted the public interest and therefore was unenforceable.
- Closing the supermarket caused difficulties and hardships on the downtown citizens, who lost the only opportunity to purchase food at a reasonably close location.
- Plaintiff's restriction impeded the relocation of another supermarket operation to the downtown area.
- This obstacle to remediation efforts by defendant city was so contrary to the public policies expressed in the New Jersey Urban Enterprise Zone Act, N.J. Stat. Ann. §§ 52:27H-60 to H89, and similar acts, that it represented a scorched earth policy that under the circumstances was unreasonable and unenforceable.
The court affirmed the judgment that held plaintiff corporation's covenant prohibiting the use of a property sold to defendant city for a supermarket was unenforceable. The covenant was so contrary to the public policy of promoting growth in the downtown area that the covenant was in these circumstances unreasonable and unenforceable.
-Having incl. in a deed a restrictive covenant that the property being conveyed would not be used as a supermarket, P, the grantor, sought to enforce the covenant against Housing Auth (D), a subsequent purchaser with actual notice of the covenant.
- intention of the parties when the covenant was executed
- if consideration was paid in exchange for the covenant
- whether the covenant clearly and expressly set forth the restrictions
- whether the covenant was in writing and recorded
- whether the covenant was reasonable in time/duration
- whether an unreasonable restraint on trade
- whether interfered with public interest
- whether changed circumstances now make covenant unreasonble
- the hardship which enforcement at the present time will impose on the covenantor (or his successor) has substantially increased since the time of the covenant due to unforeseen circumstances
- the benefit which enforcement will give to the covenantee has sub. decreased.