A Provision That Restricts the Seller from Competing with the Buyer

question 149

Multiple Choice

A provision that restricts the seller from competing with the buyer in a contract for the sale of a business is

• A) always enforceable because the parties to a contract have the freedom to contract as they see fit.
• B) always unenforceable because any attempt to restrict competition is an illegal restraint of trade.
• C) fatal to the whole contract (i.e., it causes the whole contract to fail).
• D) enforceable if it is reasonable between the parties, which means that it must be limited in time (e.g., one year) but need not be limited in area.
• E) enforceable if it is reasonable between the parties and not contrary to public policy.

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Definitions:

Child Labor

The employment of children in any work that deprives them of their childhood, interferes with their ability to attend regular school, and is mentally, physically, socially, or morally harmful.

Corporate Social Responsibility

A business approach that contributes to sustainable development by delivering economic, social, and environmental benefits for all stakeholders.

TOMS Shoes

TOMS Shoes is a company known for its One for One donation model, giving a pair of shoes to a child in need for every pair sold.

Stakeholders

Individuals or groups that have an interest in the decisions and activities of a company, project, or organization, including customers, employees, investors, and suppliers.