Mr. W sells fireworks. Under Texas law, retailers may only sell fireworks to the public during the two weeks immediately before the Fourth of July and during two weeks immediately before New Year’s Day. And so, fireworks sellers like Mr. W tend to lease property.

Mr. W leased a portion of Ozuna’s land. The lease contract contained two key terms:

• “In the event the sale of fireworks on the aforementioned property is or shall become unlawful during the period of this lease and the term granted, this lease shall become void.”
• “Lessor(s) agree not to sell or lease any part of said property including any adjoining, adjacent, or contiguous property to any person(s) or corporation for the purpose of selling fire-works in competition to the Lessee during the term of this lease, and for a period of ten years after lease is terminated.” (Emphasis added.)

A longstanding San Antonio city ordinance bans the sale of fireworks inside city limits, and also within 5,000 feet of city limits. Like all growing cities, San Antonio sometimes annexes new land, and its city limits change. One annexation caused the Ozuna property to fall within 5,000 feet of the new city limit, and it became illegal to sell fireworks from the property. Mr.W stopped selling fireworks and paying rent on Ozuna’s land.

Two years later, San Antonio’s border shifted again. This time, the city disannexed some property and shrank. The new city limit placed Ozuna’s property just beyond the 5,000-foot no-fireworks zone. Ozuna then leased a part of his land to Alamo Fireworks, a competitor of Mr. W. 

Mr. W sued for breach of contract, arguing that Ozuna had no right to lease to a competitor for a period of ten years. The trial court granted Ozuna’s motion for summary judgment. Mr. W appealed.

Questions:

1. Did Ozuna breach his contract with Mr. W by leasing his land to a competitor?

2. When did the lease become void?

3. What is the effect of the lease becoming void?