Goodwill cannot exist if a covenant not-to-compete exists.

Question

Quizplus · Accepted Answer

Goodwill and a covenant not-to-compete can coexist in a business transaction. Goodwill represents the value of a company's brand name, solid customer base, good customer relations, good employee relations, and any patents or proprietary technology. A covenant not-to-compete is an agreement where the seller of a business agrees not to start a new, competing business and not to work for a competitor for a specified period within a certain geographic area. These are separate elements that can be part of the same business sale or acquisition.

Goodwill Cannot Exist If a Covenant Not-To-Compete Exists