My mother owned a bakery and sold it off and the contract she signed contained a non-compete agreement that bans her from working at any bakery or even putting up her own business anywhere in the state of Georgia for 10 years. I have always thought that it was ridiculous.
In the sale of a business, there is no maximum time limit. It is more of a reasonableness standard on a case by case basis. Have a business attorney review the entire agreement to determine rights, obligations, enforceability, etc.
The degree to which a court will enforce such an agreement will depend on the specific facts of the situation. My first impulse is that the agreement is overbroad, however my opinion could change if I were to learn the facts behind the original sale. If she were concerned about it, I would suggest she sit down with a lawyer experienced in covenants not-to-compete and get another opinoin on the document. She could also talk to the buyer of her business and might be able to come to a new understanding.. again all of this will depend on the facts. Good luck to her.
1 lawyer agrees
Employment / Labor Attorney
A 10-year duration for a covenant not to compete ancillary to the sale of a business is a long time, but it is not unreasonable per se. Your mother may have been paid extra money in the sale of the bakery for the extra long covenant period. So, I agree with the others who said it depends on the facts. That said, I've never heard of a 10-yr covenant not to compete be enforced. These covenants are, however, more liberally construed and tolerated in the context of the sale of a business than they would be in an employment contract.
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