Question

Al has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sales contract, he agrees that he will refrain from practicing accounting anywhere within a 20-mile radius of Redwood City for a period of two years. However, on weekends he returns to his house in Redwood City, and when clients call him, he meets with them in his home.

a. Al is in violation of the sales agreement.
b. The two-year provision is likely to be held invalid, because it is too long a period of time.
c. The agreement is invalid, because it is an illegal restraint of trade.
d. The agreement is illegal, because it is a violation of public policy.

Answer 1

Answer:Option(a) is correct option

Step-by-step explanation:

According to the question, agreement between Al and CPA firm members suggests that Al cannot practice accounting under 20 miles of Redwood city for two years.

Even after being under contract conditions,Al tends to attend his accounting clients on weekends in his home situated in Redwood city.He is considered to be violating agreement terms because even though he is attending clients on weekends and in unofficial area ,he is still carrying out his accounting practice under 20 miles of Redwood city.Thus, sales agreement is getting breached by Al.

Other options are incorrect because two year period for refrain is not long as per agreement, agreement is not invalid and neither illegal because of public policy.Thus, the correct option is option(a).