Corbin sold his retail clothing business to Austin.The business was located in a small town,and most of the customers lived within a radius of five miles of the clothing shop.As a part of the sale agreement,Corbin agreed not to set up a similar business in competition with Austin for a period of five years or within a radius of five miles of the shop.
-The agreement that restricts Corbin's right to set up a business in competition with Austin will be enforceable only if it is reasonable and necessary.

Question

Quizplus · Accepted Answer

Non-compete agreements are generally enforceable if they are reasonable in scope and duration and necessary to protect the legitimate business interests of the employer or buyer. In this case, the agreement restricts Corbin from setting up a similar business in a narrow geographic area for a limited time period, which could be seen as reasonable and necessary to protect Austin's investment in the business.

Corbin Sold His Retail Clothing Business to Austin