• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Confidentiality Non-Disclosure Statement

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

Christopher3333

Junior Member
What is the name of your state (only U.S. law)? Montana
My wife (and I) were looking into buying a retail business. We signed a Confidentiality Non-Disclosure Statement (CNDS) for our realtor so we could look into the business further. After a lot of thought and consideration, my wife chose to not buy the business, and instead, open her own store. In the document that we signed, there was no "non-compete" clause. And the main reason for not buying the business was because of the lease required for the building that the business is in. The seller also stated that if she did not sell the business, she would close the doors as of 9/17/11.

We are now being threatened with a lawsuit, supposedly because my wife sent out to all of her friends on Facebook that she was opening a new business. According to the person threatening the lawsuit, in the CNDS, it says "Without seller's prior written consent, neither Buyer or Buyer's representative shall contact seller's neighbors, lenders, employees, or any other person or company in any way affiliated with the Property and/or seller".

I take this to mean that she was to not contact any of the abovementioned relating to the sale of the business.

Unknown to my wife, one of the people on her Facebook list is a consignor with this business, and now they are claiming we have potentially negatively affected the chance for her to sell the business.

In my opinion, this does not seem to be valid, but I'm not an attorney. In the Facebook message she sent out, she was announcing the opening of her store and asking any of her friends that wanted to consign with her to let her know. Again, with out a "non-compete" clause, has she done anything wrong?
 


What is the name of your state (only U.S. law)? Montana
My wife (and I) were looking into buying a retail business. We signed a Confidentiality Non-Disclosure Statement (CNDS) for our realtor so we could look into the business further. After a lot of thought and consideration, my wife chose to not buy the business, and instead, open her own store. In the document that we signed, there was no "non-compete" clause. And the main reason for not buying the business was because of the lease required for the building that the business is in. The seller also stated that if she did not sell the business, she would close the doors as of 9/17/11.

We are now being threatened with a lawsuit, supposedly because my wife sent out to all of her friends on Facebook that she was opening a new business. According to the person threatening the lawsuit, in the CNDS, it says "Without seller's prior written consent, neither Buyer or Buyer's representative shall contact seller's neighbors, lenders, employees, or any other person or company in any way affiliated with the Property and/or seller".

I take this to mean that she was to not contact any of the abovementioned relating to the sale of the business.

Unknown to my wife, one of the people on her Facebook list is a consignor with this business, and now they are claiming we have potentially negatively affected the chance for her to sell the business.

In my opinion, this does not seem to be valid, but I'm not an attorney. In the Facebook message she sent out, she was announcing the opening of her store and asking any of her friends that wanted to consign with her to let her know. Again, with out a "non-compete" clause, has she done anything wrong?
OP,

I recently posted in another thread regarding non-disclosure agreements. My thoughts were completely counter to other responses, so take that for what you will.

I am not familiar with Montana law regarding non-competition agreements. However, in my area they are highly disfavored and difficult to enforce. Enforceable non-competition agreements generally must be limited in scope, in terms of time, geography, and prohibitions. With that said, a few thoughts based on my area:

1. No magic words are required. Thus, an agreement does not need to state that it is a non-competition agreement. It might just say Non-Disclosure Agreement but have provisions related to competition.

2. The language "Without seller's prior written consent, neither Buyer or Buyer's representative shall contact seller's neighbors, lenders, employees, or any other person or company in any way affiliated with the Property and/or seller," is incredibly broad. There are no limitations on the scope of this provision in terms of time (for how long can you not contact these people?), geography (does it apply to anybody, anywhere in the world?), or prohibition (for what purpose are you not allowed to contact them?). Where I'm from, I think it is very unlikely that this language would hold up in court to prohibit competition.

I recommend you seek the advice of an attorney with knowledge of Montana law on non-competition agreements. You may want to ask that attorney about the cost of seeking a declaratory judgment to have a court rule on the enforceability of the provision.

oth
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top