The College Block v. Atlantic Richfield Co.
California Court of Appeal
254 Cal. Rptr. 179 (Ct. App. 1988)
Relevant factsFree
The College Block (plaintiff) leased land to Atlantic Richfield (ARCO) (defendant) for 20 years to build and operate a gas station, with rent set as a percentage of gasoline delivered but subject to a $1,000 monthly minimum. After operating the station for 17 years, ARCO closed it and simply kept paying the $1,000 minimum for the rest of the lease term. College Block sued, alleging breach of an implied covenant to keep operating the station.
IssueFree
Whether a court may imply a covenant of continued operation into a commercial lease where rent is structured as a guaranteed minimum plus a percentage of sales.