Question

Betty sells her Clothes Shop to Diane. In the sale agreement, there is a covenant not to compete that prohibits Betty from opening another clothing store within a certain distance. If a court concludes that this restriction is unreasonable, it will most likely:

Answer 1

Answer:

reform the covenant

Explanation:

The given case relates to anti- competitive laws / anti-trust laws. For an active-market economy, antitrust laws guarantee fair competition. Such regulations have developed alongside the economy, protecting carefully towards would-be monopoly power and disturbances to the efficient ebbs and flows of competitiveness. Thus, court can cancel or reform such a covenant if it comes under the preview of anti- trust law.