Koko Signs a Covenant Not to Compete as Part of a Sale

question 16

Multiple Choice

Koko signs a covenant not to compete as part of a sale of her ongoing medical equipment business to Laurel Valley Medico,Inc. ,in exchange for a bonus payment.The covenant is most likely enforceable by

• A)both parties.
• B)Koko,but not Laurel Valley.
• C)Laurel Valley,but not Koko.
• D)no one.

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Definitions:

Bilateral Contract

An agreement involving two parties where each promises to perform an act in exchange for the other's act.

Unilateral Contract

A contract where one party makes a promise in exchange for an act by another party, which upon performance, binds the first party to its promise.

Promissory Estoppel

A law that stops someone from going back on a commitment they've made to another if the second party has trusted this promise to their own disadvantage.

Promissory Estoppel

A judicial doctrine that forbids a party from revoking an assurance given to another party if the recipient has legitimately acted on that promise to their detriment.