McDonald v Rappaport et al

McDonald v Rappaport et al

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In the case of McDonald v Rappaport et al, Judge Tauro of the United States District Court of Massachusetts, found that the International House of Pancakes is not a fast food restaurant. Judge Tauro also highlights a few drafting points for restrictive covenants.

In a lease with McDonald's Corporation, the landlord agreed to a provision that prohibited the landlord allowing a "so-called fast food restaurant, food service establishment, drive-in or walk-up eating facility" on property owned, leased or controlled by the landlord within two miles.

The court found the provision ambiguous as to whether "so-called fast food" modified only "restaurant" or also modified "food service establishment," "drive-in" and "walk-up." The court found that "so-called fast food" applied to each term after a bench trial. In evidence was an earlier draft of the provision that did not include "fast food."

The court also went on to note that a restrictive covenant like this is a restraint on alienation. In Massachusetts, "restrictions on land are disfavored, and they in general are to be construed against the grantor and in favor of freedom of alienation.” [citing Stop & Shop Supermarket Co. v. Urstadt Biddle Props., 740 N.E.2d 1286, 1289 (Mass.App. Ct. 2000)] So the narrower reading of applying the "so-called fast food" modification applies to all of the cited uses.

Even though the McDonald's lease does not define “so-called fast food,” McDonald's and IHOP did not dispute that IHOP is not a fast food restaurant under any definition of “fast food” or “quick service.” McDonald’s and IHOP both agreed that IHOP is a full service, family style restaurant.

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Reference Info:Decision | State, 1st Circuit, Massachusetts | United States


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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