As Part of a Large Multi- National Corporation, You Are

question 46

Essay

As part of a large multi- national corporation, you are working on a deal to buy a small dot.com company from a group of young upstarts who will all benefit handsomely. It is your custom to include a restrictive covenant in such deals to prevent such young upstarts from directly competing with the company they just sold. Explain the approach taken by courts to covenants in restraint of trade and then provide an example of a restrictive covenant that is likely to be upheld if challenged in court, and an example of one that is likely to be struck down if challenged in court.

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Definitions:

American Medical Association

A professional group that represents the interests of physicians and the advancement of public health in the United States.

Licenses

Official permissions or authorizations, usually issued by a governmental entity, required to engage in certain activities or professions.

Doctors

Professionally trained individuals who diagnose and treat illnesses, perform medical procedures, and promote health and well-being.

Licensed Taxicabs

Authorized taxi services that have obtained the necessary permits and licenses from the government to operate legally.