Edmond is negotiating to purchase an existing business. One provision he should write into the sale contract is
A) access to the seller's customer list.
B) disclosure of the business's revenues for the last year.
C) a statement of the royalties payable to the seller.
D) a noncompete agreement.

Question

Quizplus · Accepted Answer

A noncompete agreement is important to prevent the seller from starting a similar business and competing with the buyer immediately after the sale. This protects the buyer's investment and ensures that the seller does not take away customers or damage the new business. While access to customer lists and revenue figures is useful information, these can be negotiated and added to the contract separately. Likewise, royalties may be an issue in certain cases, but they are less important than ensuring that the seller does not become a direct competitor.

Edmond Is Negotiating to Purchase an Existing Business