Radius Restriction Barred Buyer from Selling Groceries Only at Planned Store

A grocery store lease contained a radius restriction that barred the owner from leasing space or selling land to another grocery store at or within five miles of the center. The owner sold a section of the center's parking lot to a buyer that planned to build and operate a discount store with a grocery department. The deed for the land required the buyer to comply with the terms and restrictions of the grocery store's lease. The buyer asked the grocery store and the owner to acknowledge that the deed wouldn't restrict its planned store, but they refused. So the buyer sued the grocery store and the owner, asking the court to rule that the proposed store wouldn't violate the deed.

A North Carolina appeals court ruled that the radius restriction barred the buyer from selling groceries only at the planned store. The court said that as it related to property outside of the center, the radius restriction was a personal promise given by the owner in exchange for consideration from the tenant that was enforceable only against the owner. So the buyer could open a grocery store within five miles of the center. But as it related to land at the center—such as the land bought by the buyer—the radius restriction was enforceable against the buyer and thus did bar it from selling groceries at the planned store [Wal-Mart Stores, Inc. v. Ingles Markets, Inc.].