When Mifflin sold their business to Lawtons Drug Stores, the contract included a clause restricting them from

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When Mifflin sold their business to Lawton’s Drug Stores, the contract included a clause restricting them from opening a similar business in competition. Lawton’s had paid extra for customer goodwill, which would be lost if Mifflin were to start up a business in competition and recapture that customer loyalty. Six months later Mifflin did open up a business in competition, and Lawton’s sued for breach of contract. As part of the pre-trial discovery process, Lawton’s demanded a copy of Mifflin’s customer list. Such lists are extremely confidential and must be kept out of the hands of competitors at all costs, so Mifflin refused. Assuming the list was relevant to the proceedings, what rights do the parties have in these circumstances? What should Lawton’s do? Is there any way to compromise in these circumstances?

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