Fred has the largest pizza business in the city. He learns that Barney is thinking of opening a competing pizza and pasta delivery business. Fred promises Barney $25,000 to not open his proposed business in the same city. They sign a contract stating that Fred promises to pay Barney and Barney promises not to open the competing business. But 6 months goes by, and although Barney does not open the business, Fred doesn't pay the $25,000 in accordance with the terms of the contract. What is the likely result if Barney were to take Fred to Court

Question

Social Studies

Kendall Terry

27 July, 01:18

Fred has the largest pizza business in the city. He learns that Barney is thinking of opening a competing pizza and pasta delivery business. Fred promises Barney $25,000 to not open his proposed business in the same city. They sign a contract stating that Fred promises to pay Barney and Barney promises not to open the competing business. But 6 months goes by, and although Barney does not open the business, Fred doesn't pay the $25,000 in accordance with the terms of the contract. What is the likely result if Barney were to take Fred to Court

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Answers (1)

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Jameson · Answer 1

The Court would hold the contract was a restraint on trade and leave the parties where it found them

Explanation:

The contract was a restraint on trade as Fred has tried to build a monopoly by paying his competitors to avoid competition in his line of business. Barney takes the offer by Fred but Fred doesn't pay up, however the contract isn't legally binding on any party (even if breached) as the court won't rule in any party's favour