Which of the Following Examples of a Covenant in Restraint

question 63

Multiple Choice

Which of the following examples of a covenant in restraint of trade is most likely to be against public policy?

• A)A high-tech firm has its engineers sign a contract promising not to reveal any information about patents to any other high-tech,communications,or pharmaceutical companies during their employment tenure.
• B)Partners in an advertising agency sign an agreement that they will engage in advertising sales exclusively for the agency for the duration of their employment.
• C)The sellers of a company sign an agreement that they will not compete directly with their former company for a period of two years.
• D)An entrepreneur sells his successful home baking business to a supermarket chain.He signs an agreement that bars him from setting up a bakery business forever 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:

Apparent Agency

A situation where a principal inadvertently leads a third party to reasonably believe that another individual has the authority to act as their agent, even if no such agency relationship actually exists.

Wholesale Jeweler

A business specializing in selling jewelry in large quantities at lower prices, typically to retailers rather than direct to consumers.

Retail Jewelry Store

A business establishment that specializes in selling jewelry and related accessories to the final consumer.

Vicarious Liability

A legal principle holding one party responsible for the actions of another, based on the relationship between the parties.