Question

Barry, who owns a chain of successful home and garden pest extermination supplies stores in the five boroughs of New York City called “Bug-Away Supplies,” agrees to sell all of his stores and the accompanying goodwill to Pete, who owns a competing store chain called “Pete’s Extermination Supplies,” for $3 million. Pete operates many stores throughout New York City and new Jersey. The written and signed contract ha the following provision: “Barry agrees not to own or operate any pest extermination supplies stores within the United States for a period of 2 years following the sale of Bug-Away Supplies to Pete”.

Three months after the sale was completed, Barry opened two new business ventures. First, he opened up a new pest extermination supplies store in Queens, New York City. Second, because he will now spend his winters in Florida, he opened up a similar store in Miami, Florida. Pete has learned of these new ventures.

1. What rights, if any, does Pete have against Barry?
2. What are Pete’s rights regarding the new business in Queens and the new business in Florida?
3. What remedies, if any, are available to Pete?

Answer 1

Barry has no right to open any pest extermination or related stores in the United States and hence Pete can take legal action against Barry and claim for compensation. Pete has the right to get the license for the business cancelled and can sue Barry for not obeying the contract signed by them . He can take legal action and ensure the new business gets closed . As both the places are within United States the law stands same for both the places.