Afterwards
The non-compete
The buyer is purchasing a business and, implicitly, the seller's agreement not to rebuild it next door.
What is normally agreed
Three limits: what activity is restricted, in which territory, and for how long. Restrictions that are unreasonably wide are frequently unenforceable, but arguing that afterwards is expensive, so the time to narrow them is before signing.
The parts sellers overlook
- Whether working as an employee in the sector is caught
- Whether investing in an unrelated company in the same sector is caught
- Whether approaching former suppliers is restricted as well as customers
- Whether the restriction binds a spouse or a company controlled by the seller
A reasonable position
A clause tight enough to protect what was bought, and no tighter. Sellers who intend to start something else should say so during negotiation rather than discover the problem a year later.