Legal Question in Business Law in Arizona
We recently purchased a horse arena in Arizona. There had been monthly events happening that we have kept going. We have now found out the person we purchased the arena from is now doing these same events at a new arena close by. Although we feel this is ethically wrong, we need to know if there is any legal wrongdoing here. We feel this person is engaging in a pattern of behavior to damage out business, a business we purchased from him. Is there any action to be taken?
2 Answers from Attorneys
You should review the purchase agreement and look for any non-compete agreement or distance restrictions within the contract. These would be the best causes of action that you would be able to point to directly from your agreement. If not, you would should look at any oral or other agreements made regarding such activity and then decide if the costs associated with the action are worthy of moving forward.
Markowitz is correct; you should have a noncompete clause in your sales contract. The good news is that Arizona is very liberal in enforcement of the noncompete provisions, because otherwise, what is the buyer buying? However, the buyer has a duty to have that clause in the contract, in terms that are enforceable under current Arizona Law. If this contract was prepared for you by a third party you hired and the noncompete provisions are not in there, you may have a case for malpractice. Unless it's a business broker, in which case the broker had you sign a waiver. In any case, send us the contract, and we�ll take a quick look at it to determine your rights.
Law Offices of Donald W. Hudspeth, P.C.
3030 N. Central Avenue, Suite 604
Phoenix, AZ 85012
tele. 602.265.7997, ext. 106
fax 602.265.6099
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