Alatan owns a building supply store in Russ County. His trade extends throughout River City, the largest city in Russ County, but not beyond the county limits. He sells his store to Hilary and, as part of the transaction, agrees not to engage in the same business anywhere in River City for a period of two years. In this case:

A non-compete agreement has been made that applies a geographic restraint to Alatan.

Explanation:

Generally non-compete agreements are done between employees and their employer and in order for them to be enforceable they must be reasonable and the employee must be compensated in some way (usually when the contract is signed a special compensation must be set like a high salary or bonus, etc.).

In this case, the non-compete agreement is made between the seller and buyer of a business. The agreement includes a specific geographic restriction and lasts only 2 years, so the agreement would be considered valid by a court.

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