Cengage Advantage Books: Foundations of the Legal Environment of Business 3rd Edition by Marianne Jennings

تمرين 2

Jane Sullivan has just sold her stationery store to Will Caldwell. The store is located in Austin, Texas near the campus of the University of Texas. The store is popular with students. Although there are many other stationery stores in the Austin area, Jane's store is known for edgy cards and creative note papers. In the sale agreement for the business, Will asked for a covenant not to compete that prevented Jane from opening another stationery store in the Austin area for a five-year period. Jane could open stores elsewhere in Texas, but not in Austin or a 20-mile radius around its city center. Which of the following best characterizes the covenant not to compete?
A) It is void.
B) It is too broad and cannot be enforced.
C) Whether it is a valid covenant depends on how many stationery stores such as Jane's the Austin area can support.
D) Covenants not to compete are not valid in agreements for the sale of a business, only in employment contracts.