Legal Question in Business Law in California

I charge $100 per hour, as work out of my home and am semi-retired. Without doing any research or having additional facts, it seems to me that you have a weak case. Most anti-competition agreements as to individuals are not binding in California and yo are dealing with relatives of the former owner and not the owner himself. You can call me to discuss the case; there would be no charge for the first 10-15 minutes and you could then decide whether you want to go any further. 510-441-2684, [email protected]

Non-compete agreements involving the sale of a business with goodwill included are enforced to the extent they are reasonably limited to what's necessary to protect the goodwill. Your agreement sounds enforcible; although ten years may be stretching it a bit, but here you're only four years into the agreement.

The problem will be who and what is restrained by the agreement. Since the children and grandchildren probably aren't signatories, they probably aren't bound by the agreement. The former owner, on the other hand, may be restrained from providing them with investment money or consulting services. Check your documentation in this regard.

Further, certain acts and practices adopted by the new store may be unlawful, even without reference to any agreement. For example, the new store is probably unable lawfully to use a name that resembles your business name, even if it is a family surname.

What you may have is a case of interference with contractual relations against the son and grandson, and breach of contract against the family for helping, if I understand your facts correctly. You should send a letter letting them know of the breach, and that you intend to seek disgorgement of profits, so they are on notice from this point. While anti-competition agreements for individuals are not very enforceable because the policy is not to prevent someone from earning a living, this is a commercial contract and the purchase of a business, so it is different. It is a bad faith breach of the agreement for the family to help their family members start such a business even if not technically within the letter of the agreement. You put them on notice now, and then you can enforce your rights a little later, but dont wait too long. The key question is, does your agreement provide for attorneys fees to the prevailing party.

Best,

Daniel Bakondi, Esq.

[email protected]

415-450-0424

The Law Office of Daniel Bakondi, APLC

870 Market Street, Suite 1161

San Francisco CA 94102

http://www.danielbakondi.com

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As a Franchise Attorney I agree with the other attorney answers. The key is the specific language of the non-compete contained in your contract of sale, and the seller(s) that are bound. A retail store selling pools, accessories, etc. may not be within the scope of the non-compete if the business you bought is service. But again, the documents need to be reviewed carefully. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation

I agree with the other attorneys in pretty much all regards. You may or may not have a solid case depending on the details of the agreement, your business, the competing business and the involvement of the seller of your business in the new business. The most likely weak point will be proving that the seller's non-compete obligations have been violated by the conduct of the son and grandson. That will be hard but not necessarily impossible to establish. I maintain office and meeting facilities in downtown Sacramento and would be happy to give you a no-obligation initial consultation to go over these details with you. If you would like to do that give me a call or send me an email.