Joined: 31 Jan 2005
|Posted: Fri Jun 09, 2017 7:55 pm Post subject: Answers to Mort Hypo
|Too many of you failed to answer this hypothetical correctly. Therefore, I'm giving you a detailed answer. Today's lecture featured most of what is here, however, I want you to have it in writing also.
Issue: Is the covenant not to compete enforceable?
Rule: If all 3 elements are REASONABLE, then it is enforceable, if even one is not reasonable then it is NOT enforceable and the Courts will not enforce it.
Analysis: If ALLTHREE requirements for this covenant are enforceable then they must ALL be “reasonable”. The start of any discussion regarding the answer to this issue is to discuss the Geographic size of Tucson.
Of the 3 requirements: The easy one is length of time: Courts have decided 10 years is reasonable.
The line of business and the geographic area are inter-related, therefore, when considering reasonableness, the more esoteric/unique the type of business (line) the greater latitude the Courts will allow regarding the distance restriction. In the instant case the Court needs to discuss this inter-relationship and balance a very, very unique line of business in a city of 195.1 square miles.
Conclusion: The conclusion totally rests on how you, as individuals, decide. (It like many TV shows results in a cliff-hanger!!!!!) It's up to you decide: reasonable or unreasonable depending on your analysis!!