Question

Darren is a certified interior designer with a lucrative client list in the city of Kelsa, situated in the state of Touslon. His business affords him a substantial amount of goodwill from his clients. Darren sells his accounting interior designing business to Glenda. When he sells his business to Glenda, Darren agrees not to open another interior designing firm in the city of Kelsa for a 5 year period. What kind of agreement exists between Darren and Glenda in this case?

A. contract in restraint of trade

B. covenant not to compete

C. unconscionable contract

D. quasi-contract

All my questions that will be posted will be business law

Answer 1

Covenant not to compete is a clause under which one party agrees not a start a similar profession and compete against the other party. Hence the correct option is b. Covenant not to compete.