Judith Is a CPA with an Excellent Reputation and Client

question 16

Multiple Choice

Judith is a CPA with an excellent reputation and client base.She sells her tax preparation business to Shawn,and the sales contract includes a non-compete clause restricting Judith from opening a similar business for one year within a 10-mile radius of her former office.If she opens a tax preparation office five miles away after one year,a court would probably

• A)grant an injunction barring her from operating the new office.
• B)order confiscation of all of her new client files and turn them over to Shawn.
• C)refuse to become involved,as the non-compete clause was illegal.
• D)refuse to enforce the non-compete clause,as it is unreasonable regarding time and geographic area.

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Definitions:

Transaction Costs

Expenses incurred when buying or selling goods and services, which may include search and information costs, bargaining costs, and enforcement costs.

Voluntary Exchange

A transaction where parties involved trade goods or services by mutual agreement, without coercion.

Mutual Gain

A situation or outcome in which all parties involved benefit or profit from the arrangement or transaction.

Potential Exchange

The possibility of trading goods, services, or other items of value between parties.