C. Gaston Whiddon owned Gastons LP Gas Co., Inc. Curtis Dufour purchased the company. Since Whiddon had

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C. Gaston Whiddon owned Gaston’s LP Gas Co., Inc. Curtis Dufour purchased the company. Since Whiddon had personally operated the company for many years, Dufour was worried about competition from him and insisted on a noncompetition clause in the sales contract. The clause stated that Whiddon would not “compete with Gaston’s LP Gas Co. anywhere south of Interstate Highway 20 for nine years.” Three years later, the Herring Gas Co. offered to buy all of Dufour’s gas business, assuming that Whiddon would not be a competitor for six more years. Dufour sold all of the assets to Herring, keeping the actual corporation “Gaston’s LP Gas Co.” for himself. What mistake in drafting have Dufour and Herring made?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Business Law and the Legal Environment

ISBN: 978-1111530600

6th Edition

Authors: Jeffrey F. Beatty, Susan S. Samuelson, Dean A. Bredeson

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