What Is an Exclusive Use Clause in a Commercial Lease?

 Posted on February 19, 2026 in Commercial Lease Agreements

If you find the right retail space in a great location with strong foot traffic and you’re ready to sign, it can be difficult to slow down and ask whether you’ve thought through every contingency. Here’s one question not enough business owners ask themselves: What happens if a direct competitor moves into the same shopping center six months from now? 

If your commercial lease does not say anything about this situation, the answer may not be one you like. If you’re a business owner looking at a new commercial lease in 2026, you need to understand exclusive use clauses and how they work before signing anything. Our DuPage county commercial real estate attorney can review your lease and make sure your interests are completely protected.

What Is an Exclusive Use Clause in a Commercial Lease?

An exclusive use clause is a provision in a commercial lease that gives a tenant the right to be the only business of a specific type at a property or shopping center. In plain terms, it stops your landlord from renting space to your direct competitors in the same location.

If you run a yoga studio, an exclusive use clause could prevent the landlord from leasing to another fitness studio in the same center. If you own a sandwich shop, it could keep a competing deli from moving in next door. The clause defines your business category and reserves that category for you alone within the property.

Without this protection, your landlord is free to rent to whoever they choose, including businesses that could pull customers directly away from you. Illinois courts will enforce well-drafted exclusive use clauses as binding contract provisions, but the language has to be precise and it needs to be in writing. Any commercial lease longer than one year needs to be in writing anyway, per 740 ILCS 80/2, but a vague promise or poorly written clause can put your business at risk.

What Is a Radius Clause and How Does It Work With an Exclusive Use Clause?

A radius clause is a related but separate protection. While an exclusive use clause focuses on who else can operate inside your shopping center, a radius clause limits where you yourself can open additional locations.

Landlords often insist on radius clauses to protect their own investment. They do not want a tenant opening a nearly identical location two blocks away and taking sales from the leased property, which would affect the landlord's percentage rent income.

From a tenant's perspective, radius clauses need to be negotiated carefully. An overly broad radius clause can seriously limit your ability to grow your business. If a landlord insists on a radius clause, you want it to be as narrow as possible in terms of both geographic reach and the type of business activity it covers.

When exclusive use and radius clauses appear in the same lease, they create a framework that defines competitive boundaries for both sides. Getting that framework right takes careful drafting and negotiation.

What Should a Strong Exclusive Use Clause Include?

Not all exclusive use clauses are created equal. A strong clause protects you in practical terms, not just on paper. Here are the elements that matter most:

• A precise definition of your protected business category that is broad enough to cover your actual operations
• Clear language about what property or properties the exclusivity applies to
• Remedies you can pursue if the landlord violates the clause, such as rent abatement or the right to terminate the lease
• Whether the clause survives lease renewals and any assignment of the lease to a new landlord
• Carve-outs that are limited and clearly defined so a landlord cannot use vague exceptions to undermine the protection

Call an Oakbrook, IL Commercial Real Estate Lawyer Today

The protections you negotiate before you sign your lease have a huge impact on your business’s success for the entire lease term. Attorney Lindell is ready to review your lease, explain what it means in plain language, and make sure your exclusive use and radius clause language actually does what you need it to do.

We work methodically behind the scenes to make sure every provision is clear, enforceable, and aligned with your business goals. When a lease is drafted or reviewed by someone who understands both the legal and transactional dimensions of commercial real estate, you can sign with confidence rather than crossed fingers.

Call Lindell & Tessitore, P.C. at 630-778-3818 to speak with a DuPage County commercial lease negotiation attorney who will work to help your business thrive.