covenant not to compete
- A clause in a business sale contract where the seller promises not to start the same business for a set duration or within a specified location. This clause assigns a value to this promise in the sale price
- When selling his coffee shop, John included a covenant not to compete to reassure buyers he won't start a new shop nearby.
- The covenant not to compete in the contract prevented the previous owner from opening a similar restaurant in town for three years.
- Before selling, the proprietor made a covenant not to compete, so the new owners wouldn't have to face competition from him.
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