Vendor Disputes

Thursday, December 19, 2013

A Primer on the "200 Foot Rule" and the "500 Foot Rule" and How They Affect Your Liquor License Application

What is the “200 Foot Rule”?

The Alcoholic Beverage Control Law prohibits liquor licenses from being issued if the location of the establishment is within 200 feet of a building used exclusively as a school or place of worship on the same street. If the establishment or place of worship is on a corner lot, the building is considered to be on both streets. In that instance, you must measure the distance from your main entrance door to the nearest door at the place of worship/school on your street that is routinely used by patrons, students, or the general public.

How do you determine if a building is used “primarily” as a school or place of worship?

In order for the 200 foot rule to apply, the courts have adopted a test that looks at whether the building is used exclusively as a school/place of worship. For example, if a building contains a place of worship and residential apartments, the 200 foot rule would not apply. If, however, the building was used as a place of worship, but also held private social functions for the benefit of its congregants, the 200 foot rule would still apply because the social functions are viewed as incidental to the building’s main use as a place of worship.


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Wednesday, February 6, 2013

Buyer Beware: Linen Supply Agreements

Before entering into a contract with a linen supply company, read the fine print! Some linen supply companies use misleading sales tactics to lure clients in, but then place different (and often unfair) terms into the written agreement. There have been several recent court decisions in New York regarding this seemingly common problem.

In Best Metropolitan Towel & Linen Supply Company, Inc. v. The Oar Steak & Seafood Grill, a restaurant owner was orally promised a two-year contract by a representative for the linen supply company. However, when the restaurant owner tried to terminate services after two years, it was discovered that the written agreement demanded a five-year term. The agreement further provided for a “liquidated damages clause”, which requires the restaurant owner to pay a significant amount of damages for early termination of the agreement. The linen supply company sued the restaurant, and the Court awarded the linen supply company over $8,000 in liquidated damages, claiming that the restaurant owner breached the contract by failing to continue using the linen company for the full five years, despite the original two-year oral agreement, which could not be proven. Lesson learned: make sure you get everything in writing.


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