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Jan opens a sandwich shop across the street from a sandwich shop run by Amy. Amy is disturbed by this competition and agrees to pay Jan $5000 in exchange for Jan's promise to quit her business and not to engage in a similar business within a ten-mile radius of Amy's business. Is this contract legal and enforceable? Why or why not? If the agreement is not enforceable, how might Jan and Amy restructure it to increase its chances of being legal?

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This is a bilateral contract akin to a non-compete agreement. It is most likely enforceable because the geographic distance within it is so small. However, this depends on the area as a ten mile distance in a big city is nothing but in a rural area where there is only one ...

Solution Summary

Discussion on the legality of contracts