Legal Question in Business Law in Massachusetts

Re: Covenant not to compete

Generally, covenants not to compete are a good idea, especially in a service business. Enforceability varies from state to state. California will rarely enforce them, Massachusetts will usually enforce them, New Jersey is somewhere in the middle. If you are in Massachusetts, a typical noncompete clause would include time and geographical restrictions (eg. for one year and within 50 miles). It should also have other clauses dealing with nondisclosure, trade secrets, and dispute resolution, etc. You can find a sample at http://www.ilrg.com/forms but note that it may require adjustments; use it only as a guide and not as a substitute for legal counsel.

Re: Covenant not to compete

You really should not be buying a business without legal counsel of your own. Moreover, in the setting that you describe, the non-competition covenant is the MOST important aspect of the deal. And, yes, in the context of the sale of a business, every state (even California) enforces such covenants, precisely because it is the main consideration in the purchase.

If you already have a clear indication from the "seller" that he intends to compete after the sale, I would advise against completing the purchase.

Best wishes,

LDWG

Re: Covenant not to compete

You have strayed too far with a person who intends to give you a hard time. While you have not described the business, a person that sells you a business in one breath who can take customers with the others, is a recipe for you losing you investment+.