In 2009, Elegant Beverages, LLC, and Imperial Unlimited Services, Inc., were two beverage businesses that were sold to Mark Gandino from Thomas, Kathleen, and Loudine Dotli. The beverage companies would sell, supply, and service beverage products and beverage dispensing products in North Carolina and South Carolina. Gandino organized the assets of the two companies under Beverage Systems of the Carolinas, LLC. Under the terms of sale, the Dotlis agreed not to compete with Beverage Systems for five years. $10,000 of the purchase price was the consideration for the non-competition agreement.

In 2011, Loudine’s wife, Cheryl Dotli, who was not part of the non-competition agreement, formed Associated Beverages, LLC and began installing vending machines in North and South Carolina. Shortly thereafter, Associated Beverages began business with a customer previously served by Beverage Systems. Gandino found out about Cheryl Dotli’s new enterprise and sent a cease and desist letter. Following Associated Beverages’ lack of response, Gandino sued, asserting claims of tortious interference of contract with businesses in the region. After a series of appeals, the case wound its way up to the state Supreme Court.

Gandino argued that while Beverage Systems repaired vending machines at an at-will basis, and not by contract, the customers and customer lists transferred to Beverage Systems by the original company transfer created implied-contracts that Associated Beverages violated. Assuming Cheryl Dotli and Associated Beverages is beholden to the non-competition agreement, did they engage in tortious interference with contract? Why or why not?

What if the non-competition agreement was not valid?