Texas law permits businesses to utilize noncompetition agreements to protect their legitimate business interests in certain circumstances.
Companies, attorneys and the courts generally focus on the consideration that must be exchanged in order for the parties to create a legal, enforceable noncompete agreement. However, since courts analyze noncompetes under standard contract interpretation principles, the language beyond the exchange of consideration can also be critical to the enforceability of an agreement.
A recent case from the Court of Appeals of Texas in Texarkana highlights this importance.
Seller agreed not to compete …
In East Texas Copy Systems, Inc. v. Player, the Court of Appeals in Texarkana evaluated a noncompete contained in an asset purchase agreement. As part of the sale of the business, the seller agreed not to compete with the buyer within a specified geographic area for a period of two years.
The agree...(register to read more)