Protecting the Business Purchaser: Restrictive Covenants Accompanying the Sale of a Business

 
The New Jersey Law Journal recently published an article co-authored by Michael L. Rich and Steven P. Gouin, entitled Protecting The Business Purchaser, on the use of restrictive covenants in contracts for the sale of businesses.  Though more often discussed in the context of employment contracts, restrictive covenants are also extremely important when selling or buying a business. A restrictive covenant provides an important protection to the purchaser by ensuring that he receives the full benefit of the goodwill of the business. In essence, it protects the business purchaser’s expectations. A carefully tailored restrictive covenant will protect the purchaser from unwanted competition for years after the business sale takes place.  The article is a must read for anyone buying or selling a business.