## Facts

- Dover Shopping Center, Inc., owned a shopping center and leased a store to Cushman’s Sons, Inc., a retail bakery chain.
- The parties executed a lengthy, heavily negotiated written lease, with counsel involved and multiple negotiated insertions.
- The lease restricted use to a retail bakery and contained an express covenant requiring the tenant to operate continuously and keep the store open during customary business hours (with limited exceptions).
- Rent included a fixed minimum plus a percentage of gross sales, tying the landlord’s return to the tenant’s ongoing operation.
- Cushman’s opened and operated the bakery for about two years, then permanently ceased operations as unprofitable, removed signage, and left the premises closed while continuing to pay only the minimum rent.
- Dover alleged loss of percentage rent and harm to the shopping center from a dark, inactive storefront reducing customer traffic and harming other tenants.

## Issues

1. Whether a court may order specific performance, by mandatory injunction, of an express continuous-operation covenant in a commercial percentage-rent lease when the tenant stops operating but continues paying minimum rent.
2. Whether money damages are an adequate legal remedy for the landlord’s claimed losses from the tenant’s nonoperation.
3. Whether compelling operation should be denied because it would require ongoing judicial supervision of a business.

## Decision

- The Appellate Division affirmed the Chancery Division’s mandatory injunction requiring Cushman’s to reopen and operate the bakery in compliance with the lease.
- The court held that the express operating covenant was enforceable and was a bargained-for inducement for the lease.
- The court concluded damages were not an adequate remedy given the difficulty of proving lost percentage rent and related shopping-center harms.
- The court rejected the argument that enforcement would require excessive supervision because the decree imposed limited, objectively verifiable obligations (reopen and keep open during required hours, maintain a salesperson/manager, and display signage), not control of business methods or product quality.
- The court left intact the dismissal of Cushman’s counterclaim and the denial of monetary damages sought by Dover (which Dover withdrew at trial).

## Legal Principles

- An express continuous-operation covenant in a commercial lease may be specifically enforced where it was clearly negotiated and forms a material part of the parties’ exchange.
- In percentage-rent shopping-center leases, damages may be inadequate when lost percentage rent and traffic-related effects are difficult to quantify without speculation.
- Specific performance is more likely when the decree can be framed as compliance with simple, definable duties, avoiding detailed oversight of day-to-day business operations.
- A tenant’s continued payment of minimum rent does not negate an express contractual duty to operate when the lease makes operation a material obligation.

## Conclusion

The court enforced a negotiated continuous-operation clause by mandatory injunction, reasoning that the landlord’s losses under a percentage-rent shopping-center lease were not readily measurable in damages and that the order could be enforced without intrusive supervision beyond ensuring the store reopened and remained open as required.


Dover Shopping Ctr., Inc. v. Cushman’s Sons, Inc., 63 N.J. Super. 384 (App. Div. 1960)