An exclusive use clause grants the tenant the sole right to operate a specific type of business or sell particular products within the shopping center or building. The clause prevents the landlord from leasing other spaces to direct competitors, protecting the tenant's customer base and sales volume. The scope of the exclusivity — how narrowly or broadly the business category is defined — is the most critical drafting consideration.
By Angel Campa, Founder · Updated March 2026
Without an exclusive use clause, a landlord can lease the adjacent suite to a direct competitor on the day after signing. For food and beverage tenants, restaurant chains, service businesses, and specialty retailers, exclusivity can be the difference between a profitable location and one that cannibalizes sales. Courts have generally enforced exclusive use clauses strictly against landlords who violate them, but only if the prohibited category is precisely defined — vague exclusivity provisions are frequently litigated and often fail to protect the tenant.
Define the exclusive use category as broadly as the landlord will accept while remaining commercially reasonable (e.g., "the sale of coffee and coffee-based beverages, espresso drinks, and whole-bean coffee" rather than just "coffee shop"). Ensure the exclusivity applies to the entire property, not just the landlord's currently owned portion, and include carve-outs for existing tenants with appropriate notice obligations. Specify remedies for breach, including the right to pay percentage rent only during periods of violation and a cure period before termination rights attach. Require the landlord to include compliance language in all future leases for the property.
Narrow product exclusivity (limited to specific SKUs or menu items), broad category exclusivity (entire business type), and radius restrictions extending exclusivity beyond the immediate property. Some leases include "existing tenant" carve-outs that exclude current tenants from the exclusivity but prevent the landlord from adding future competitors. Food courts typically have narrower exclusivity than traditional in-line retail.
Lextract extracts these fields directly from your lease PDF when this clause is present:
Radius Restriction Clause
A radius restriction clause prohibits the tenant from operating a competing business within a defined geographic radius of the leased premises during the lease term.
Co-Tenancy Clause
A co-tenancy clause is a lease provision — almost exclusively found in retail leases — that gives a tenant the right to pay reduced rent or terminate the lease if certain anchor tenants or a minimum occupancy threshold in the shopping center falls below a specified level.
Continuous Operation Clause
A continuous operation clause requires the tenant to keep the leased premises open and actively conducting business during all required business hours throughout the lease term.
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