## Facts

- A shopping-center lessor’s predecessor leased a newly constructed supermarket building to Piggly Wiggly under a lease drafted by Piggly Wiggly.
- The lease term began in 1964 for 15 years, requiring substantial fixed annual base rent plus percentage rent on annual gross sales above $2,000,000.
- The lease was renewed in 1979 for seven years on the same terms and included two additional three-year renewal options, both of which Piggly Wiggly exercised.
- One month into the second three-year renewal term, after a corporate acquisition, Piggly Wiggly closed the store, vacated the premises, and relocated its grocery operation to a nearby center owned by its new parent.
- Piggly Wiggly continued paying base rent but declined to sublease the space despite interest from other supermarkets.
- The lease’s use clause stated that the lessee’s use “shall not be limited nor restricted” to supermarket purposes and that the premises “may be used for any other lawful business, without the consent of LESSOR.”
- The lessor sued for damages, asserting the lease required continuous operation to generate percentage rent and function as an anchor tenant.

## Issues

1. Whether the lease contained an express covenant requiring the tenant to continuously operate a business on the premises.
2. Whether a covenant of continuous operation should be implied from the lease structure (base rent plus percentage rent) and the commercial context.

## Decision

- The Georgia Supreme Court reversed the judgment for the lessor.
- The court held the lease contained no express covenant of continuous operation.
- The court held no covenant of continuous operation could be implied because the lease language and structure were inconsistent with such an obligation.
- Because the tenant continued to pay the required base rent, closing and vacating the premises did not breach the lease absent an express or implied continuous-operation duty.

## Legal Principles

- Courts enforce commercial leases according to their plain language and will not add terms that contradict or extend the written agreement.
- A lease clause granting the tenant broad discretion to use the premises for “any other lawful business” without the landlord’s consent is inconsistent with a continuous-operation requirement.
- The presence of substantial fixed base rent (even alongside percentage rent) weighs against implying a continuous-operation covenant.
- A continuous-operation covenant will not be implied where the instrument contains no indication the parties bargained for such a duty and other provisions (such as broad use rights and assignability) point the other way.

## Conclusion

The court held that a tenant who continues to pay substantial base rent does not breach a commercial lease by ceasing operations and vacating the premises when the lease neither expressly requires continuous operation nor supports implying such a covenant in light of broad permitted-use language and the contract’s overall structure.


Piggly Wiggly S. Inc. v. Heard, 261 Ga. 503, 405 S.E.2d 478 (Ga. 1991)