Legal Question in Business Law in California

I sold the equipment necessary to run a certain business, with the intention of carrying on a similar business. I mentioned to the purchaser that i was to continue with that similar business and i had begun that similar business before the sale. Now the purchaser is claiming that i sold him a business and that i should cease the similar business.

There was no contract in place.

The buyer is claiming that i never mentioned my other business and that he requested written T&Cs;as well as a contract, beforehand, this is not true.

Am i liable in any way? And does the buyer have the right to make any demands on me?


Asked on 4/12/14, 3:37 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

While I can't guarantee that the buyer won't threaten to sue, or even actually file a lawsuit, I'd think you would be a clear winner under the facts given. California law strongly favors competition. There is some tolerance for written sale-of-business contracts containing rather limited (in time and geographic extent) non-compete clauses, I can't imagine a court implying a non-compete agreement or condition into an oral agreement for the sale of equipment necessary to run a business. Even if you had sold a business the law would not find an implied agreement not to compete. However, I have to disagree with you on one point. You say there was no contract in place....what you probably mean is that there was no written contract. Your deal with the buyer would necessarily involve an oral contract.

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Answered on 4/12/14, 5:14 pm


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