Jurisdiction(s):
United Kingdom

Key definition

Restrictive Covenant definition

What does Restrictive Covenant mean? A restrictive covenant is a promise not to carry out specified acts. In practice it arises chiefly in land transactions and in employment or commercial agreements. The expression is descriptive and shaped largely by case law, with statutory frameworks for registration and modification. Land law (England & Wales and Northern Ireland): a negative covenant affecting land use may bind successors in equity if it benefits identifiable land and “touches and concerns” it, the original parties intended the burden to run, and a successor takes with notice (now usually via registration). Protection is by entry of a notice on the registered title,...

Restrictive Covenants: Injunction or Damages? Shelfer and Coventry Guidance on Equitable Discretion, Assessing Compensatory, Negotiating and Profit-Share Damages, and the Impact of Delay and Acquiescence

Published by a LexisNexis Property Disputes expert

Practice notes

This Practice Note sets out when, for breaches of Restrictive covenants, the court may grant Damages rather than an injunction, how such damages are quantified, and the effect of any delay by the beneficiary in bringing a claim.

Damages or injunction—the test

As a rule, the principal response to breach of a Restrictive Covenant is a final injunction restraining the misconduct. That said, the court can substitute damages in place of injunctive relief. Save where the original Covenantor is in breach, this is an equitable jurisdiction, so the remedy is discretionary. The court may weigh the parties’ conduct—for example, the beneficiary’s delay or inaction—as evidence that an award of damages in lieu could be appropriate.

In Shelfer v City of London Electric Lighting, the court articulated a ‘working rule’ for preferring damages where:

the infringement of the claimant’s legal rights is minor
the harm is readily assessable in monetary terms
a modest financial award would provide adequate compensation, and
granting an injunction would be unduly harsh on the defendant

However, in Coventry v Lawrence (a noise nuisance case)...

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Web page updated on 21/05/2026

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