Payton gets a job as a salesman for a pharmaceutical company. He agrees that if he leaves his employment, he will not work for another pharmaceutical company for a period of two years. That type of agreement is called a[n] ________.

A) Covenant not to compete
B) Necessary covenant
C) Employment completion agreement
D) Covenant of good faith agreement
E) Covenant of favored employment

Question

Jakob Stein · Accepted Answer

Final Answer : A, Explanation :  A covenant not to compete, also known as a non-compete clause, is an agreement where one party agrees not to enter into or start a similar profession or trade in competition against another party. In this scenario, Payton agrees not to work for another pharmaceutical company for two years if he leaves his job, which is a classic example of a covenant not to compete.

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