Reference no: EM132887868

Lilly is a clothes designer who has set up her own label of clothing. She has entered many of her creations into fashion shows and received a number of rave reviews for her daring and innovative fashion styles. Since she has made such a success of her work, Lilly decided it was important to have an established outlet for her clothing.

Lilly has an old friend, Brenda, who owns a dress shop in the Northland Shopping Centre. Brenda's lease is about to expire so she was not going to renew and was prepared to walk away from the shop because it was not very profitable. Lilly decided Brenda's shop was ideally located for an outlet for her clothing line. Lilly approached Brenda and made the following proposition. Lilly would make Brenda's shop the exclusive outlet for her clothing line if she would renew her lease with Northland Shopping Centre for a further five years. In reliance of this, Brenda renewed the lease for a further five years.

Lilly's clothing line becomes wildly popular and demand increases substantially. She receives a number of offers from clothing store chains to sell her clothes. Brenda is delighted her store is now trading profitably. When she tells Brenda about these offers an argument starts over what she has promised in relation to the 'exclusive' outlet arrangement with Brenda. They have a complete falling out and Lilly tells Brenda, '...You can forget about being the exclusive outlet and I don't want you selling my clothes at all...' Lilly stops supply of clothes to Brenda's store and as a result her business quickly goes downhill.

In the absence of a suitable clause in the lease, can Brenda terminate the lease with Northland Shopping Centre? Does Brenda have any claim against Lilly, either at common law and/or under statute? Advise Brenda. In your answer make sure you refer to relevant legal principles and cite authorities where applicable.