What is the term for requiring a leasee to use certain providers of service?

Full question:

What is the term for requiring a leasee to use certain providers of service or product as a condition of the property lease? Is such lease condition legal? This question arises from a boat lease for a lake slip where the lessor now requires the leasee to use specific(one of two) boat storage facilities also owned by the lessor for winter boat storage

  • Category: Consumer
  • Subcategory: Unfair Practices or Competition
  • Date:
  • State: Idaho

Answer:

A tying arrangement is an agreement requiring that a buyer to purchase other goods or services through the seller as a prerequisite to purchasing the desired goods or services, or requiring that the buyer will not purchase that product from any other supplier. Tying arrangements can violate a number of antitrust laws. However, some are permissible, such as banks and other lending institutions requiring borrowers to purchase credit life or disability insurance as a precondition of a loan. The elements of an illegal tying arrangement include two separate products or services; a sale or an agreement to sell one product (or service) on the condition that the buyer purchase another product or service (or the buyer agrees not to purchase the product or service from another supplier); the seller having sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product and the tying arrangement must affect a "not insubstantial" amount of commerce.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

A lease that transfers title of property to the lessee is known as a 'lease purchase agreement' or 'lease-to-own agreement.' In this arrangement, the lessee has the option to buy the property at the end of the lease term, often at a predetermined price. This type of lease gives the lessee both the right to use the property and the potential to own it in the future.