Before examining the reasonableness of a noncompetition agreement, courts first consider whether the agreement is ancillary, meaning connected and subordinate to another valid contract. If there is no such contract, the court will look to see if there was valid consideration to enforce such an agreement. If there is no adequate or independent consideration present, most courts will refuse to enforce such an agreement. This is to ensure that the noncompetition agreement is not an outright restraint on trade but, rather, the result of a bargained-for exchange that furthers legitimate commercial interests.
When a businessman sells his business, the purchaser may compete with him unless there is a valid restrictive covenant or covenant not to compete. The same is true when an employee leaves the employment of a company and begins soliciting customers of his former employer or competing with his employer in a similar way. When an ongoing business is sold, it is commonly stated in the sales contract that the seller shall not go into the same area or begin a similar business within a certain geographical area or for a certain period of time or both. Such an agreement can be valid and enforceable.
Restrictions to prevent competition by a former employee are held valid when they are reasonable and necessary to protect the interests of the employer. Courts will closely examine covenants not to compete signed by individuals in order to make sure that they are not unreasonable as to time or geographical area.
When a restriction of competition is invalid because it is too long or covers too great a geographical area, Courts will generally do one of two things. Some Courts will trim the restrictive covenant down to a period of time or geographical area that the Court deems reasonable. Other Courts will refuse to enforce the restrictive covenant at all and declare it void.
Caution: Statutory law in a few states completely prohibit covenants not to compete unless the covenant meets the state's statutory guidelines.
Maine General Non-Competition Agreement refers to a legally binding contract that restricts one party from engaging in competitive activities that may pose a threat or competition to another party within the state of Maine. This type of agreement is commonly used in employment or business relationships to protect proprietary information, trade secrets, and customer relationships. The Maine General Non-Competition Agreement typically includes various clauses and provisions that define the agreement's scope, duration, geographical limitations, and specific activities or industries that are restricted. It aims to safeguard the legitimate business interests of employers or companies by preventing former employees, business partners, or sellers of a business from directly competing or working for competitors in the same field. Some common types of Maine General Non-Competition Agreements include: 1. Employment Non-Competition Agreement: This agreement is used between employers and employees to prohibit the employee from joining a competitor or starting a competing venture within a specified timeframe and geographical area after leaving the company. 2. Non-Competition Agreement in Sale of Business: This agreement is entered into during the sale of a business, where the seller agrees not to establish or participate in a similar business that competes with the acquired business within a defined time and area. 3. Non-Competition Agreement for Independent Contractors: Independent contractors may also be subject to non-competition agreements that restrict their ability to work for competitors or engage in competitive activities during or after the contract period. 4. Partnership Non-Competition Agreement: Partners in a business partnership may sign non-competition agreements to prevent each other from engaging in business activities that may undermine the partnership's interests or lead to competition among partners. It is important to note that the enforceability of Maine General Non-Competition Agreements can vary depending on factors such as reasonableness, necessity to protect legitimate business interests, and compliance with the state's laws. Maine courts generally review non-competition agreements on a case-by-case basis to ensure they are reasonable, geographic scope, and necessary to protect employers' interests without unduly burdening employees or stifling free competition. Therefore, it is advisable to consult with a legal professional to understand the specific requirements and limitations of Maine General Non-Competition Agreements.
