Reese contracts to sell her Saucy Pizza restaurant to Titian. As part of the deal, Reese agrees not to open a competing business within a hundred-mile radius for ten years. Reese later sues Titian, alleging that the agreement is illegal. To enforce the covenant not to compete, the court will most likely

Question

Quizplus · Accepted Answer

Courts generally disfavor covenants not to compete as they can restrict business competition. However, if the covenant is reasonable in terms of distance, time limit, and scope, the court may enforce it. In this case, the covenant not to compete may be excessive as it restricts Reese from opening a competing business within a hundred-mile radius for ten years. Therefore, the court is likely to reform the contract to make the distance and time limits reasonable rather than awarding damages or rescinding the contract. Specific performance is unlikely in this case as it would require Reese to comply with the original, perhaps unreasonable, terms of the agreement.

Reese Contracts to Sell Her Saucy Pizza Restaurant to Titian