Question: Moran owned a woodcarving business situated in a plaza in

Moran owned a woodcarving business situated in a plaza in Valley Forge, Pennsylvania. He carved unique items such as toys, picture frames, and miniature model cars that would sell quickly. His products were very popular, and people would come to his plaza store to make purchases. Moran also traveled to various parts of Pennsylvania selling his items at various town events. Because his items were unique, he had no competition. Ritz, a person who worked for Moran and possessed the same talents, offered to buy the business if Moran would sign the following statement as part of the contract of sale: “I agree not to reenter my current business in Valley Forge, Pennsylvania, or to travel anywhere in the state of Pennsylvania to sell the items that I currently make and sell or to compete in any manner; I further agree to refer all business contacts that call me to Ritz. This clause is valid for ten years.” In violation of this agreement, Moran opened a similar business in competition with Ritz and in violation of the noncompete agreement. Is the covenant not to compete valid and enforceable in this case?

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  • CreatedSeptember 15, 2015
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