Question
Adina owns Yogis Yogurt in Fort Smith, Arkansas. Adina sells the yogurt shop to Dagmar. The contract for the sale of the business includes a
Adina owns Yogis Yogurt in Fort Smith, Arkansas. Adina sells the yogurt shop to Dagmar. The contract for the sale of the business includes a clause that prohibits Adina from owning or working in any restaurant in Arkansas for two years from the date of the sale. One year after the sale is completed, Adina opens a steakhouse in West Memphis, Arkansas, which is 300 miles from Fort Smith. If Dagmar sues Adina for breaching the terms of the contract:
a. Dagmar will probably lose because the covenant not to compete is too restrictive.
b. Dagmar will probably win because covenants not to compete are always enforceable.
c. Dagmar will probably win because Adina opened a new restaurant in Arkansas within two years of the sale of Yogis Yogurt and this was directly prohibited by the contract.
d. Dagmar will probably lose because covenants not to compete are never enforceable.
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