What's in a word? In Hellenic Investment v. Kroger, one word defined a significant part of the contractual relationship. Pasadena Associates leased space to Kroger, a large grocery store. As part of its lease, Pasadena agreed not to lease to a bar, nightclub, or any other business of that kind. Pasadena leased to Hellenic which opened an establishment called "Hallabaloo." Under its lease, Hellenic, could use its leased space for either a restaurant or dining facility and "with the sale of alcoholic beverages, dancing, games, and related facilities and activities." Hellenic acknowledged Pasadena could not lease to a bar or nightclub under the Kroger terms and conditions. Hellenic warranted that it was not a bar or nightclub. It also acknowledged that if there were any complaints that it would alter its operations. Hellenic opened Hallabaloo, a "supper club" after investing $100,000. It was a huge success but caused Kroger many problems. Its customers were harassed; they could not park; and trash was in the parking lot on weekends. The parties tried to work things out, but could not come up with a workable solution. Kroger sued gaining a permanent injunction, which enjoined Hellenic from operating and Pasadena from leasing to a "night club." The order defined a "night club" as an "operation selling alcoholic beverages while also, in combination, playing loud volume dance music, providing a space for dancing, and allowing its patrons to dance, so long as its gross food sales make up less than 70 percent of the gross sales of all sources." Hellenic appealed disputing the definition and characterization of the word "night club." Each party had experts testify as to what constituted a "night club." In its opinion, the court focused on the custom and usage of the term "night club." Under the law, evidence is permitted to explain ambiguous terms to ascertain the intent of the parties. Based upon the expert evidence presented and the explanation of what the term "night club" meant, the appeals court agreed that the lower court could have properly found that Hellenic was operating a bar or night club facility as the term was used in Hellenic's lease. The permanent injunction was affirmed with the court finding for Kroger.

Questions for Analysis Review Hellenic Investment, Inc. v. Kroger Company. What actions could Hellenic have taken to satisfy the court that it was not a bar or nightclub? Did Hellenic breach its lease terms or were there other issues motivating this case? Explain your answers.