The current daily analysis should take into account an audit of the target market concerned, the area in which the seller operated and the extent of the seller`s private expertise. The geographical boundaries of competition prohibitions are often considered enforceable as long as they are compatible with the seller`s commercial services sector in which the seller has served and can thus have an unfair advantage. Nevertheless, the courts will consider whether the non-competitive agreement was specifically respected with respect to the conditions of applicability in the particular circumstances of the seller and the buyer. Non-compete obligations resulting from the sale of a business often pose complex problems for both buyers and sellers. At Lubin Austermuehle, P.C. Our chicago economic litigation lawyers represent companies in sales transactions and non-compete litigation. We can help put an end to litigation before they begin, by checking contracts to look for alliances and clauses that could cause problems in the future, and we can represent companies – both complainants and defendants – if a non-compete clause comes up later. We are pleased to support customers throughout the Chicago area, including Naperville, Wheaton, Vernon Hills and many other Illinois cities, as well as customers in Indiana and Wisconsin. In Musselman, when a business was sold, a non-competitive agreement was reached between the buyer and the seller. Glass Works, LLC has entered into an agreement to purchase B-L Auto Glass – Mirror, Inc. from its client Young.
In the competition agreement, Young agreed not to conduct transactions similar to those of B-L for a period of five years within a 100-mile radius of the city. The out-of-competition agreement provided for consideration, as Glass Works agreed to pay Young $US 615 per month for 60 months for a total of $36,900. Glass Works made monthly payments until Young`s death. The administrator of Young`s estate filed a breach of contract complaint in order to withdraw the amounts earned under the non-compete agreement. The executor argued that this payment was part of the purchase price and therefore did not stop when Young died. The Tribunal found that the language of the agreement specified that the amount owed should be included in the purchase price. The payment of Glass Works for non-competitive agreements was explicitly stated in the agreement as part of the company`s purchase price. The court found that Young`s death was not contrary to competition and that Glass Works did not deprive the advantage of his good business. The courts in North Carolina take into account the territorial scope and duration of the restrictions when it is established that a non-competitive agreement is appropriate. Therefore, a three-year restriction of competition within a geographic area may, for example, be appropriate, but inappropriate in a larger geographic area. 2.1 to recruit, acquire or assist a customer, customer or employee of the company for the purposes of competing with the company; BOTTOM LINE: In the case of a business sale, both the buyer and the seller run a real risk that one of the parties will face a dispute with this provision in the years following the sale, if a non-compete regime is not properly drafted and is either too broad or too narrow. Both parties should therefore spend a great deal of time reviewing the agreed competition restrictions that end up in the sales documents and ensuring that these restrictions are clearly established.