Non Compete Clause Negotiation

Suppose that Jack, Sophia, and Hal enter into a contract to close on the business without the non-competition agreement. Jack states that he would probably sign the non-competition agreement if they included an extra $*,*. A month later, Hal and Sophia bring Jack $*,*. What is the result? If Jack does not accept the $*,*, he may not sell the frozen food, but only for a reasonable amount of time. Jack cannot change his mind, since he stated that he would probably accept $*,* additional for the non-competition agreement. If Jack does not accept the $*,*, there is a valid contract for the sale of the business, without a non-competition clause. If Jack does not accept the $*,*, there is no valid contract for the sale of the business or for the non-competition agreement.

Suppose at the end of the meeting, Jack makes an offer regarding the restaurant buyout, which includes the non-competition agreement. Prior to Hal and Sophia agreeing to the offer however, Jack changes his mind. Can he do so? No, unless the offer states that it is revocable. No, once an offer is made, it can never be revoked. Yes, and there is no need to actually communicate the revocation to Hal and Sophia (or their agent) prior to acceptance. Yes, as long as he actually communicates the revocation to Hal and Sophia (or their agent) prior to acceptance.

Suppose at the end of the meeting, Jack makes an offer regarding the restaurant buyout, which includes the non-competition agreement. Prior to Hal and Sophia agreeing to the offer however, Jack changes his mind. Can he do so? No, unless the offer states that it is revocable. No, once an offer is made, it can never be revoked. Yes, and there is no need to actually communicate the revocation to Hal and Sophia (or their agent) prior to acceptance. Yes, as long as he actually communicates the revocation to Hal and Sophia (or their agent) prior to acceptance.

Suppose that Jack states that he would sell the restaurant with the non-competition agreement for an extra $*,*. Hal and Sophia say they will buy the restaurant, but will only pay an extra $*,* for the non-competition agreement. Jack says no to this counteroffer. Hal and Sophia then say they will pay $*,* for the non-competition agreement. Do they now have a valid contract? Yes, but only for sale of the restaurant, without the non-competition agreement. There would be no valid contract. Yes, for the sale of the restaurant with non-competition agreement for an extra $*,*. Yes, for the sale of the restaurant with the non-competition agreement for an extra $*,*.

Suppose that Jack, Hal, and Sophia enter into an agreement in regards to the sale of the restaurant. The contract includes the non-competition agreement. A few months later, Jack decides that he will sell the frozen food in violation of non-competition agreement, unless if Hal and Sophia agree to pay him an extra $*,*. Hal and Sophia agree, since they do not want to fight. Six months later, however, they still have not paid and Jack sues. What is the result? Jack would win since agreeing to not do something, in this case sell the food, is not valid consideration. Hal and Sophia would win since agreeing to not do something, in this case sell the food, is not valid consideration. Hal and Sophia would win, since Jack already had a prior existing legal duty to not compete with them. Jack would win since Hal and Sophia agreed to pay the extra $*,*.

Suppose that Jack, Hal, and Sophia enter into an agreement for the sale of the restaurant, with Jack stating in the agreement that if he feels comfortable with his finances in his retirement, that he will not sell the frozen food in competition with the restaurant. After the sale, the stock market rises considerably, and Jack’s net worth quadruples. He still decides to sell the frozen food. Hal and Sophia sue. What is the result? Hal and Sophia would win since the contract mentioned the non-competition agreement. Hal and Sophia would win since Jack’s net worth quadrupled. Jack would win, unless that Hal and Sophia could prove that Jack was comfortable with his finances in his retirement. Jack would win since the promise not to compete was illusory.

Suppose that Jack, Hal, and Sophia enter in to a contract for the sale of the business. Jack was drunk at the time that the negotiations took place, and at the time of the signing of the contract. Is the contract valid? The contract is voidable only if Jack’s intoxication was involuntary. The contract is void. The contract is voidable by any party. The contract is valid unless Jack did not know he was entering into the contract, or lacked the mental capacity to comprehend its nature.

Assume Jack was drunk during the contract negotiations and signing, and that the contract was voidable due to Jack’s intoxication. Two years later after the signing, Jack sues to undo the contract. Which of the following would be Hal's and Sophie’s best defense against this action? That Jack was voluntarily intoxicated at the time of the negotiations and signing of the contract. That Jack was intoxicated very often. That the contract is void. That Jack, by waiting two years, ratified the contract.

Assume that a contract was entered into for the sale of the restaurant, and that the sale included the covenant not to compete. Which of the following is true? The covenant not to compete must be reasonable in geographic scope to be valid. The contract for the sale of the business would be valid, but the covenant not to compete will be void. The contract would be void, as covenants not to compete are a restraint of trade. The contract would be void as covenants not to compete are only valid when they are part of a valid employment contract.

Suppose that Jack, Hal, and Sophia enter into a contract for the sale of the restaurant. Hal and Sophia inventory the restaurant and find that there is a case of bald eagle meat in the refrigerator, which is illegal to possess. This was unknown to them at the time of the agreement. Which of the following is true? The illegal part of the contract would be severed from the contract for the sale of the business, which would be enforced. The contract would be void since the parties are in pari delicto. The contract would likely be voidable by Jack. The contract would be void due to illegality.

Heather is sixteen but looks much older. She goes into a jewelry store and buys a diamond bracelet with the money she has been saving for college. If Heather realizes a year later that it was unwise to spend the money on the bracelet, she: a. can return the bracelet, but she will only get * percent of what she paid for it. b. cannot return the bracelet, because she has kept it too long. c. can return the bracelet and get her money back. d. can disaffirm this contract only if she has turned eighteen.

Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered *.Not Answered Question Workspace Check My Work Egbert, who is sixteen years old, purchases a $* video game system and a $* computer chair from CompuStore. Egbert changes his mind and wants to avoid the contract for the video game system but not the computer chair. Egbert may: a. may not disaffirm the contract because it is for necessaries. b. disaffirm part of the contract for the video game system as he wishes. c. disaffirm only the computer chair because it is incidental to the contract. d. only disaffirm the entire contract.

George is a minor who lives on his own. He orders clothing from FastShop. George later wants to disaffirm the contract. George can: a. disaffirm the contract because this contract is unconscionable. b. disaffirm the contract, but must pay for the reasonable value of the goods. c. disaffirm the contract and keep the clothing without payment because he is a minor. d. not disaffirm the contract.

Melissa is a minor who agrees to purchase a car from Umberto for $*,*, one month after she turns *. Upon turning *, Melissa writes to Umberto, stating that she still agrees to purchase the car. Melissa’s contract with Umberto is: a. enforceable because Melissa and Umberto agreed to the purchase of a car. b. enforceable because it has been expressly ratified by Melissa. c. unenforceable because Melissa was a minor when she entered into the contract. d. unenforceable because Melissa has a right to disaffirm the contract.

To celebrate his seventeenth birthday, Alan buys a new computer. Two weeks later, his parents insist that he return it. Alan’s attempt to return the computer will be: a. successful, because he has acted within a reasonable time. b. unsuccessful, because he has waited too long. c. successful, if he pays a fine. d. unsuccessful unless he gets court approval.

Paul goes to a bar, has seven shots of whiskey, and then goes to an electronics store and buys a $*,* stereo system. If he later wants to avoid the contract based on his intoxication when he made the purchase, he will need to prove that: a. the store clerk knew he was intoxicated. b. he lacked the mental capacity to enter into the contract. c. a reasonable person would have known that he was intoxicated. d. his capacity to act would be classified as “legally unstable.”

Elisa truly believes that she is a space alien from the planet Zelnor. She walks into a car dealership and buys a new Volkswagen Jetta, telling the salesperson that she needs a sample of Earthling transportation to beam back to her home planet. If Elisa wants the option to avoid her contract later, she must: a. prove that the salesperson talked her into buying the car. b. prove that the car dealership did not take adequate precautions to prevent sales to mentally disturbed individuals. c. prove that she lacked adequate mental capacity when she bought the car. d. prove that a court had judged her to be mentally incompetent previously.

A judge ruled that Ron was mentally incompetent, placed him in a hospital, and appointed a guardian. Ron escaped from the hospital and purchased a recreational vehicle. In this situation: a. Ron can avoid the contract only if the salesperson knew he was mentally ill. b. Ron’s contract was void from the start. c. Ron cannot avoid the contract as long as he had sufficient funds to pay for the vehicle. d. Ron has a valid contract.

Keisha contracts with a broker to invest all of her savings. The year goes badly, and she loses almost all the money. She is too ill to return to work and will be penniless if she cannot avoid the contract. Which of the following applies? a. She can appeal to her governor for clemency. b. She has no legal recourse. c. She can avoid the contract based on the general gambling rule. d. She can avoid the contract because stock market transactions are against public policy.

Patrick agrees to pay Anna $*,* in exchange for Anna taking Patrick’s hazardous waste and surreptitiously dumping it on the property of a competitor. After Anna dumps the waste, Patrick refuses to pay. This contract will: a. be enforced because both parties agreed to the contract and will be held accountable to its terms. b. be unenforceable due to usury laws. c. be enforced because it has sufficient consideration and is a bargained-for exchange. d. be void from the outset and thus unenforceable.

Daniel enters into a contract that requires him to pay interest at a rate greater than the legal state maximum. The contract might be enforceable if: a. Daniel is a minor. b. the loan is for a small amount and Daniel would not be able to obtain a loan otherwise. c. Daniel’s guardian entered into the contract for him. d. the contract is reasonable.

Amjed sues Larry, a landowner on whose property Amjed was injured. Larry believes that Craig is a lawyer and hires Craig to defend him in the lawsuit. Craig is not a lawyer, so the contract between Larry and Craig: a. will be enforced only if Craig wins. b. will not be enforced. c. will be enforced unless Craig loses the case. d. will be enforced despite Craig’s winning or losing of the case.

Western Widget Co., Karelia Manufacturing Inc., and Johnson Industries Co. all enter into a contract to not recruit each other’s employees, and to set coordinated prices for their products sold in the U.S. market for the next three years. This contract is: a. unenforceable because it is a restraint of trade. b. enforceable because it is not unconscionable against one or more of the parties. c. enforceable because it is not illegal. d. unenforceable because it involves an agreement between businesses.

Jacob decides to sell his well-known dry cleaning business to Fred. In the sale agreement for the business, there is a clause stating that Jacob cannot open a competing dry cleaning business within ten miles of the business he is selling to Fred. This part of the agreement is known as: a. a reformation. b. a covenant of goodwill. c. a covenant of satisfaction. d. a covenant not to compete.

Marcy owns a trucking company that hauls goods all over the country. Wilson contracts with Marcy’s company to transport ten tractor-trailer loads of goods from Ohio to Texas. After delivery of the goods, Marcy has reason to believe the goods are stolen, but never asks Wilson about it. The contract: a. is enforceable, because Marcy's company was justifiably ignorant of the fact that the goods were stolen. b. is unenforceable unless Marcy's company can return the goods. c. is unenforceable, because the goods were stolen and Marcy’s company cannot collect its fee. d. is unenforceable, and Marcy's company is now liable for the stolen goods.

GavelCo Insurance sells an insurance policy to Barry in the state of Colorado. GavelCo violates a Colorado state statute when doing so. Later, Barry gets into a dispute with GavelCo over coverage under the insurance policy and wants to enforce the contract. The insurance contract will be: a. unenforceable. b. enforceable by both parties just as any other contract. c. enforceable by Barry, the purchaser, and he can recover from the insurer if applicable. d. enforceable, but only if a court finds the contract unconscionable.