Legal Question in Business Law in Tennessee
non-compete clause in sale of business contract
Sold a portion of our social service business. One of the homes that received services from us went with the company we sold to. However, the ''home'' is unhappy with the services, states they no longer want the new company. They fired the new company. ''Home'' contacted our company(which serviced them previously) and wanted to know if we would come back. In our contract of sale it stated: ''Seller agrees to a non-compete clause'' including services rendered in the city of Memphis, TN or the surrounding area for three years. This care home is in Memphis, TN. Is this a breach on our part if we go back to the care home since they ''fired'' the new company and we did not contact the ''home'' but they contacted us. Also there was no additional paperwork stating it was the ''non-compete clause''. This was just mentioned in a paragraph in the contract. To be enforceable should there have been additional paperwork entitled ''non-compete clause''?
--name removed--Putnam
1 Answer from Attorneys
Re: non-compete clause in sale of business contract
Non-compete clauses can be very tricky to enforce. They must have been carefully drafted at the outset. If not, there are opportunities for the other party to bust them.
The first thing we would do is look at the complete agreement. We would look to see if the language of the restriction is enforceable. We would also look to see based on our experience and the applicable case law whether there are grounds to safely engage in some of the conduct regardless of the agreement.
At Crone & Mason we have a tremendous amount of experience in dealing with non-compete agreements. We would be happy to review it and discuss your options with you. Please feel free to contact us at 901.683.1850 ask for my Legal Secretary Amber.
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