Comment by Abigail M. Hufft
It is common to see a Walmart close to a Target or a Burger King near a McDonald's.1 While some businesses purposely choose to open next to competition, other businesses do not want neighboring stores offering the same products or services. Business owners, whether renting or buying property, may be unwilling to invest large sums of money if they do not have protection from direct competitors opening nearby.4 Accordingly, anti-competition agreements that restrict businesses from participating in certain activities have become commonplace in commercial deals.
While anti-competition agreements may appear attractive in theory, questions surround how long such agreements should last, specifically whether the agreements may “run with the land” like traditional servitudes.6 Should the restrictions automatically pass to the next buyer or tenant of the property? Or should the restrictions automatically dissolve when the property is transferred? And if so, does that expose the business that originally sought the restrictions to potential competition?
Louisiana courts are divided over whether anti-competition agreements are real rights that remain with the land even after ownership changes or only personal obligations between the parties to the contract. While “[a] real right in Louisiana attaches to movable or immovable property, and is automatically transferred to a subsequent successor in interest to the property,” a personal obligation “depends on whether the obligation is classified as heritable or strictly personal” and can only be enforced by the original parties. Some Louisiana courts have found that anti-competition agreements are personal to the parties who contracted for them, meaning that when, for example, the lease ends, the property is freed from the restriction. Other Louisiana courts have upheld these agreements as real rights that run with the land, turning to Louisiana predial servitude laws as the vehicle for enforcement.
This division among the courts over anti-competition agreements stems from Louisiana “law favor[ing] the free and unrestricted use of immovable property.” Instead of keeping these properties easily transferable on the open market, anti-competition agreements arguably tie up the land with certain restrictions that could potentially run with the land in perpetuity, binding future owners or tenants. Yet, without anti-competition agreements, the reality of modern business practices and real economic concerns for businesses are ignored. The lack of clear rules and consistent judicial interpretations surrounding anti-competition agreements in Louisiana has left Louisiana law on the issue of anti-competition agreements in a state of confusion.
This Comment argues that Louisiana should adopt the view that anti-competition agreements that are reasonable may give rise to predial servitudes. Louisiana courts have oversimplified their analysis of anti-competition agreements, and in doing so, jurisprudence has failed to provide a roadmap for when it is appropriate to enforce anti-competition agreements as predial servitudes. In effect, the enforcement of these agreements is left up to chance with no legislative guidance. Instead, as a civil law jurisdiction, Louisiana should include a standard in legislation that courts can use to determine when an anti-competition agreement is enforceable. This Comment highlights how Louisiana courts have already implicitly adopted an inherent reasonableness standard when analyzing conventional predial servitudes in other instances and argues that this reasonableness standard should apply for anti-competition agreements too. By allowing anti-competition agreements that are reasonable to give rise to predial servitudes, Louisiana law would balance business interests with the broader interests of favoring free and unrestricted property.
Part II of this Comment provides a brief background on conventional predial servitude law in Louisiana. Part III discusses how courts have employed an inherent reasonableness standard when analyzing conventional predial servitudes created by acquisitive prescription and destination of the owner. Part III also examines how that inherent reasonableness standard is absent when courts analyze conventional predial servitudes created by juridical act. Part IV details the inconsistent rulings from Louisiana courts on whether anti-competition agreements create real rights or personal obligations. Part V draws inspiration from the common law, Louisiana building-restriction laws, and Louisiana's paternalistic check on juridical acts to recommend a modest statutory proposal to the Louisiana State Law Institute. This proposal to adopt a reasonableness standard into the conventional predial servitude article allows for anti-competitive predial servitudes to exist while also honoring property law's theme of keeping property in commerce. Part VI briefly concludes.
About the Author
Abigail M. Hufft, J.D. Candidate 2026, Tulane University Law School; B.S., 2023, Louisiana State University.
Citation
100 Tul. L. Rev. 579