ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, January 4, 2005

Town claims its planning law overrides its contract covenants

Red_rooster An Australian city council is trying to have its cake and eat it, too.  Or rather, its chicken.

The Goulburn-Mulwaree City Council sold a parcel of land to a McDonald’s hamburger franchise.  It promised, as part of the deal, that no part of the larger lot that included the parcel would be used for a fast-food restaurant.  But it now wants to permit a Red Rooster chicken franchise to build on the lot.  Red Rooster is Australia's largest BBQ chicken franchise.

McDonald’s says it’s a clear breach of contract.  Lawyers for the council say that the town’s planning law supersedes any real estate covenants. But the council is holding off on a decision for now, until it gets a clear legal opinion.

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