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.
A Missouri General Non-Competition Agreement, also known as a Missouri Non-Compete Agreement, is a legal document that outlines the terms and conditions under which an individual or business agrees not to compete with another individual or business in the same industry or geographical location for a specified period of time. In Missouri, non-competition agreements are typically used in employment contracts or in the sale of a business. These agreements are designed to protect the legitimate business interests of employers or sellers, mainly by preventing employees or former business owners from using their knowledge, skills, or connections to gain a competitive advantage against their former employer or business. The Missouri General Non-Competition Agreement may include the following key elements: 1. Identification of Parties: Names and addresses of the parties involved (employer/seller and employee/buyer). 2. Duration and Scope of Non-Competition: The length of time and geographical area in which the employee or buyer is restricted from engaging in competitive activities. 3. Non-Disclosure and Confidentiality: Provisions outlining the protection of confidential information, trade secrets, and intellectual property rights. 4. Non-Solicitation: A clause preventing the employee or buyer from soliciting or recruiting the employer's or seller's clients, customers, or employees. 5. Consideration: A statement indicating what the employee or buyer receives in exchange for agreeing to the non-compete terms, such as employment, salary, or the purchase of a business. 6. Severability: A provision stating that if any part of the agreement is deemed unenforceable, the remaining terms will still be valid and enforceable. It is important to note that Missouri law places certain restrictions on the enforceability of non-competition agreements. The courts generally consider the reasonableness of the restrictions, the impact on the employee's ability to earn a living, and the legitimate business interests being protected. There are different types of non-competition agreements specific to Missouri, including: 1. Employee Non-Competition Agreement: Used in employment contracts, this agreement restricts employees from competing with their employer during and after employment. 2. Sale of Business Non-Competition Agreement: Used in the sale of a business, this agreement prevents the seller from starting a similar business or competing with the buyer within a specific area and time period. 3. Independent Contractor Non-Competition Agreement: This agreement is used when engaging independent contractors and restricts them from competing with the contracting party during the term of the agreement and sometimes afterward. Ensuring the validity and enforceability of a Missouri General Non-Competition Agreement requires careful consideration of the specific facts and circumstances involved. It is advised to consult with an experienced attorney to draft or review such agreements to ensure compliance with Missouri laws and protect the interests of all parties involved.A Missouri General Non-Competition Agreement, also known as a Missouri Non-Compete Agreement, is a legal document that outlines the terms and conditions under which an individual or business agrees not to compete with another individual or business in the same industry or geographical location for a specified period of time. In Missouri, non-competition agreements are typically used in employment contracts or in the sale of a business. These agreements are designed to protect the legitimate business interests of employers or sellers, mainly by preventing employees or former business owners from using their knowledge, skills, or connections to gain a competitive advantage against their former employer or business. The Missouri General Non-Competition Agreement may include the following key elements: 1. Identification of Parties: Names and addresses of the parties involved (employer/seller and employee/buyer). 2. Duration and Scope of Non-Competition: The length of time and geographical area in which the employee or buyer is restricted from engaging in competitive activities. 3. Non-Disclosure and Confidentiality: Provisions outlining the protection of confidential information, trade secrets, and intellectual property rights. 4. Non-Solicitation: A clause preventing the employee or buyer from soliciting or recruiting the employer's or seller's clients, customers, or employees. 5. Consideration: A statement indicating what the employee or buyer receives in exchange for agreeing to the non-compete terms, such as employment, salary, or the purchase of a business. 6. Severability: A provision stating that if any part of the agreement is deemed unenforceable, the remaining terms will still be valid and enforceable. It is important to note that Missouri law places certain restrictions on the enforceability of non-competition agreements. The courts generally consider the reasonableness of the restrictions, the impact on the employee's ability to earn a living, and the legitimate business interests being protected. There are different types of non-competition agreements specific to Missouri, including: 1. Employee Non-Competition Agreement: Used in employment contracts, this agreement restricts employees from competing with their employer during and after employment. 2. Sale of Business Non-Competition Agreement: Used in the sale of a business, this agreement prevents the seller from starting a similar business or competing with the buyer within a specific area and time period. 3. Independent Contractor Non-Competition Agreement: This agreement is used when engaging independent contractors and restricts them from competing with the contracting party during the term of the agreement and sometimes afterward. Ensuring the validity and enforceability of a Missouri General Non-Competition Agreement requires careful consideration of the specific facts and circumstances involved. It is advised to consult with an experienced attorney to draft or review such agreements to ensure compliance with Missouri laws and protect the interests of all parties involved.
