Which of the Following Examples of a Covenant in Restraint

question 56

Multiple Choice

Which of the following examples of a covenant in restraint of trade is most likely to be contrary to public policy and therefore invalid?

• A)A high-tech firm requires its engineers to contractually promise that, during their terms of employment, they will not reveal any information about patents to any other high-tech, communications, or pharmaceutical companies.
• B)Partners in an advertising agency contractually promise that, during their time with the partnership, they will engage in advertising sales exclusively for the agency.
• C)A contract for the sale and purchase of a business prohibits the vendors from directly competing with their former company for a period of two years.
• D)A contract for the sale and purchase of a bakery requires the sellers to promise that they will never own or operate another bakery anywhere in the world.
• E)A franchisor requires a franchisee to conduct the franchise operations solely in accordance with the written franchise agreement and not in any other manner.

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Definitions:

Informal Punishment

Punitive actions or sanctions that are not officially sanctioned by law but occur through social or community norms and practices.

Formal Punishment

A system of penalties imposed by institutions or organizations to enforce rules and discourage misconduct.

Capital Punishment

The legal authorization to put someone to death as a penalty for a crime.

Gender Equality

The state in which access to rights or opportunities is unaffected by gender, allowing individuals of all genders to participate fully in all societal areas.