Asked by
michael clapperton
on Nov 23, 2024
Verified
X sold his retail clothing business to Y. The business was located in a small town, and most of the customers lived within a radius of eight kilometres of the clothing shop. As a part of the sale agreement, X agreed not to set up a similar business in competition with Y for a period of five years or within a radius of eight kilometres of the shop. The agreement which restricts X's right to set up a business in competition with Y will only be enforceable if it is reasonable and does not adversely affect the public interest.
Reasonable
Pertaining to actions, decisions, or conditions that are logical, fair, and sensible under the circumstances.
Public Interest
The welfare or well-being of the general public and society, often considered in legal and policy decisions.
Restricts
Imposes limitations or conditions on actions, access, or behaviors, often through regulations, laws, or contracts.
- Understand the consequences that restrictive covenants and competition laws have on business operations.
Verified Answer
RM
Learning Objectives
- Understand the consequences that restrictive covenants and competition laws have on business operations.