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Why a business seller might want to propose locking itself up with a non-competition covenant

If you ever sell a business, and New York law applies to the sale contract, then you might want to proactively propose a non-competition covenant for a limited period that you know you can live with — and that expressly allows you to compete after the period has expired. Otherwise, you might find yourself under an implied non-competition covenant that prohibits you in perpetuity from competing with your former company for the business of your former customers. This apparently will be the result in Bessemer Trust Co., N.A. v. Branin, Nos. 08-2462-cv(L) and 08-2677-cv(XAP) (2d Cir. Apr. 5, 2012). For a more-detailed explanation, see a write-up by Paul Freehling at the Trading Secrets blog.

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