Legal Question in Business Law in South Dakota

No compete clause

I am wondering, if we have a no compete clause in a signed partnership dissolution statment stating "Seller agrees for a period of 1 year from the date of this agreement, not to open his/her own shop w/in a 10 mile driving radius of the existing business" if the seller could legally open a business in a spouses name within 1 block of the business he/she sold out of?

Asked on 6/29/00, 6:25 pm

1 Answer from Attorneys

Lawrence Graves Coolidge & Graves PLLC

Re: No compete clause

"It depends what the word 'legally' means." If you are asking whether this constitutes a violation of statutory law, then the answer is plainly that it is not "illegal." However, if you are asking whether you are likely to be sued for doing this, and whether such suit is likely to succeed, then I opine "yes" and "yes," respectively.

Executive summary: Don't do it.

Best wishes,

LDWG

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Answered on 9/06/00, 8:20 am


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