Question

"Caf-Fiend is an expanding chain of coffeehouses. The company offers to buy Bessie's Coffee Shop, in St. Louis, on these terms: Bessie will manage the store, as Caf-Fiend's employee, for one year after the sale. For four years after the sale, Bessie will not open a competing restaurant anywhere within 12 miles. For the same four years, she will not work anywhere in the United States for a competing coffee retailer. In the first clause, Bessie agrees that for four years after the sale, Bessie will not open a competing restaurant anywhere within 12 miles. Is this enforceable against Bessie?

a) No. Not under any circumstances.

b) Yes, if the courts find this clause reasonable.

c) Yes, regardless if it is reasonable or not.

d) Absolutely not, even if the courts determine this as reasonable.

Answer 1

The clause preventing Bessie from opening a competing restaurant or working for a competitor is enforceable if a court deems it reasonable, considering factors such as geographical scope and time frame.

Step-by-step explanation:

The enforceability of a non-compete clause, such as the one offered to Bessie by Caf-Fiend, is dependent on the clause being found reasonable by the courts. This involves assessing factors such as the duration of the restriction, the geographical scope, and whether it protects a legitimate business interest with undue hardship on the employee. Typically, the court may consider if the limitation is reasonable in terms of time and space, and if it serves a legitimate business purpose without being overly restrictive or harsh on the former owner's ability to earn a livelihood.In the hypothetical scenario provided, the clause preventing Bessie from opening a competing restaurant within 12 miles for four years and barring her employment at any competing coffee retailer in the United States is contingent upon the court's determination of its reasonableness.

Therefore, the answer is (b) Yes, if the courts find this clause reasonable.The enforceability of the clause stating that Bessie will not open a competing restaurant anywhere within 12 miles depends on whether the courts find this clause reasonable.Non-compete agreements like this are generally enforceable as long as they are considered reasonable in scope, duration, and geographic area. The reasonableness of the restrictions would be determined by the court based on factors such as the nature of the business, the level of competition, and the impact on Bessie's ability to find alternative employment.So, the correct answer is b) Yes, if the courts find this clause reasonable.