Why Are Contracts Prohibiting Competition with a Buyer of a Business

question 40

Multiple Choice

Why are contracts prohibiting competition with a buyer of a business or an employer assignable?

• A)To protect the goodwill of the business.
• B)To protect the employees from losing their jobs.
• C)To protect the interest of the public.
• D)To protect the value of the assets to be sold.

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Definitions:

Breach

The violation or non-fulfillment of a legal obligation, contract, or duty, which may give the aggrieved party the right to legal remedies.

Restitution

A legal principle requiring a party who has unjustly gained at another's expense to compensate the victim.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by all parties involved to be enforceable.

Punitive Damages

Financial compensation awarded in lawsuits as a punishment to the defendant, over and above actual damages.