Shoddy,the owner of Shoe Repair,was contemplating retirement.He therefore contracted to sell his business to Pauline Parker.Shoe Repair was located in Hoosierburg,Indiana,which has a population of 5,233.Apart from containing a provision entitling Parker to use the Shoe Repair name for the business,the parties' contract included a clause that prohibited Shoddy from opening any competing shoe repair shop in Hoosierburg for a period of one year from the date of the parties' contract.Two months after the date of the contract (and one and one-half months after the sale of the business to Parker had been completed),Shoddy grew tired of retirement.As shoe repair had been his life's work,he opened up a shoe repair shop in Hoosierburg.Parker sued him in an effort to obtain an injunction against his operation of the competing business,alleging a violation of the parties' contract.How is the court likely to rule? Explain your reasoning.

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Zybrea Knight · Accepted Answer

Final Answer : The court is likely to rule in favor of Parker and to enforce the clause against Shoddy.The noncompetition provision was ancillary to a contract for the sale of a business and was for a legitimate purpose: furthering Parker's interest in not having Shoddy immediately open a competing business and lure away the very customers for whose goodwill Parker had just paid under the contract.In addition,the one-year time period does not seem excessive,and the geographical scope (applying only to competing in the small town of Hoosierburg)is reasonable.Finally,it does not appear that enforcing the clause will impose an undue hardship on Shoddy or the public.Shoddy opened his new shop in order to have something to do,not because he was in financial distress.Moreover,nothing in the facts suggests that Hoosierburg residents will be seriously harmed if Shoddy is prevented from operating a competing shoe repair shop for several more months.

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