A covenant not to compete in a contract for the sale of a business protects the goodwill of the existing business for the buyer.

Question

Quizplus · Accepted Answer

A covenant not to compete (also known as a non-compete agreement) in a contract for the sale of a business helps to protect the buyer by preventing the seller from competing with the business after the sale. This can help to ensure that the existing customers and goodwill of the business remain with the buyer, rather than being siphoned off by the seller. Therefore, a covenant not to compete in a contract for the sale of a business does indeed help to protect the goodwill of the business for the buyer, making answer A the correct choice.

A Covenant Not to Compete in a Contract for the Sale