covenant not to compete


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covenant not to compete

n. a common provision in a contract for sale of a business in which the seller agrees not to compete in the same business for a period of years or in the geographic area. This covenant is usually allocated (given) a value in the sales price. (See: covenant)

References in periodicals archive ?
Goodwill must be both salable and transferable, and in the absence of a covenant not to compete with the purchaser, there can be no transfer of goodwill.
creates an after-the-fact covenant not to compete and is contrary to the strong public policy favoring employee mobility.
Restrictive covenants between medical doctors are not detrimental to the public interest because the restricted doctor can be just as useful to the public in another location outside the restricted area; and the physician can always resume his practice in the restricted zone once the time duration of the covenant not to compete has expired (Gillespie v.
For example, a covenant not to compete may restrict a former employee from competing with his employer for five years within a 30 mile radius.
To be enforceable, however, a covenant not to compete must restrict competition no more than is reasonably necessary to protect the employer's legitimate interests, in terms of the agreement's duration, geographic scope and the prohibited activities.
A covenant not to compete should entail a reasonable time period and geographic scope, and penalties should be itemized (i.
Also, except in very extraordinary circumstances, he should always provide a covenant not to compete.
A covenant not to compete with the association after the employee leaves is a different matter.
Ross was paid between $100,001 and $250,000 for signing a covenant not to compete with Super D Drug Acquisition as part of the sale.
These assets could not be considered to be owned by MIC because the father never entered into a covenant not to compete or any other agreement with MIC that would result in a transfer of rights in those assets to MIC.
We won't be discussing how companies can write an ironclad covenant not to compete, but we will explore how talented individuals with in-demand skill sets can maximize their opportunities in the marketplace despite a covenant not to compete.

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