University Club of Chicago v. Deakin
Illinois Supreme Court
106 N.E. 790 (1914)
The University Club of Chicago (University Club) (plaintiff) leased a storeroom to Earl Deakin (defendant) for use as a jewelry shop, with a lease provision barring the University Club from renting any other store in the building to a tenant specializing in selling Japanese or Chinese goods or pearls; the University Club then leased another storeroom to Sandberg, whose lease merely barred him from operating a pawnshop or specializing in pearl sales, but Sandberg nonetheless sold pearls anyway. After discovering this, Deakin notified the University Club it had violated the exclusivity provision and that he was entitled to terminate the lease; when the University Club refused to cancel, Deakin vacated at the end of June 1909 and stopped paying rent, prompting the University Club to sue for unpaid rent, which the trial and appellate courts awarded.
Whether, if a lease contains covenants to be performed by both parties, the lease is a bilateral contract for which any breach of a vital provision gives the non-breaching party the right to terminate the lease.