Al, an accountant, has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sale contract, he agrees that he will refrain from practicing accounting anywhere within a 60-mile radius of Redwood City for a period of two years. However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home. In this case:

Question

Quizplus · Accepted Answer

The agreement between Al and Able and Baker, which restricts Al from practicing accounting within a 60-mile radius of Redwood City for two years, is a common type of non-compete clause often found in the sale of a business. Such clauses are generally considered valid if they are reasonable in scope, geography, and duration to protect the legitimate interests of the buyer. In this case, the restriction seems reasonable to prevent Al from directly competing with the business he sold, and thus, his actions of meeting with clients in his home within the restricted area would likely be seen as a violation of the agreement.

Al, an Accountant, Has a Tax Service and Accounting Business