A covenant not to compete imposed as part of a sale of an ongoing business will be enforced even if the restrictions are unreasonable.

Question

Quizplus · Accepted Answer

A covenant not to compete can only be enforced if it is reasonable in scope, duration, and geographic area. Courts will typically not enforce restrictions that are overly broad or go beyond what is necessary to protect a legitimate business interest. Therefore, even if the covenant is included in a sale of an ongoing business, it must still meet the standard of reasonableness to be enforceable.

A Covenant Not to Compete Imposed as Part of a Sale