Darren is a certified interior designer with a lucrative client list in the city of Kelsa, situated in the state of Touslon. His business affords him a substantial amount of goodwill from his clients. Darren sells his accounting interior designing business to Glenda. When he sells his business to Glenda, Darren agrees not to open another interior designing firm in the city of Kelsa for a 25-year period. What kind of agreement exists between Darren and Glenda in this case?
A) contract in restraint of trade
B) covenant not to compete
C) unconscionable contract
D) quasi-contract

Question

Quizplus · Accepted Answer

The agreement between Darren and Glenda is a covenant not to compete, which prohibits Darren from opening another interior designing firm in the same geographical area for a specified time period after selling his business to Glenda. This type of agreement is commonly included in the sale of businesses and is meant to protect the new owner from competition by the previous owner.

Darren Is a Certified Interior Designer with a Lucrative Client