Question

please give full answer starting with an issue and fully explaned terms.

Ad and Bookem, an accounting firm operating nationally over a long period of years, with branch offices in all major cities and coverage of all major industrial areas in the United States, acquired the entire practice and goodwill of Sub and Div. another accounting firm operating nationally, with branch offices in all major cities. The price was to be paid in ten annual installments. The agreement contained a provision that provided that the five major partners of Sub and Div, both individually and as members of the accounting firm, were not to engage in practice anywhere in the United States for three years. (a) Is the provision enforceable? Explain. (b) Assuming the provision is enforceable, what remedies does Ad and Bookem have against any of the partners who breach the contract provision? Explain.

Answer 1

Given Ad and Bookem an Accounting firm in uS has acquired the entire practice and Goodwill of Sub and Div. another Accounting firm opertating nationally. There is aprovision in a contract stating that the five major partners of Sub and Div, both individually and as members of accounting Firm, were not to engage in practice anywhere in United states for 3 years.

Valid Contract: A contract to be valid there should be an offer and acceptance by both the parties.

Both the parties to the contract, Ad and Bookem, Sub and div agreed to the terms of the contract, so it is said to be a valid contract.

Enforceable: The legal agreement between the parties which is not restricted by any law is called enforceable.

The provision in the contract , that the five major partners of Sub and Div, both individually and as members of accounting Firm, were not to engage in practice anywhere in United states for 3 years.

This is not against any law because, Ad and Bookem is safeguarding from partners of Sub and Div from getting competed if they start other accounting firm. SO, he imposed a restriction for 3 yearsany where in US. This restriction is reasonable and is enforceable by law.

Breach of Contract: A contract is legally binding between the parties. Any of the party breaks the terms of th contract, it is said to be breach of the contract.

The provision to the partners not to engage in a practice is material to the contract. If any of the partner makes such material breach to the contract, Ad nd Bookem have the following Remedis.

Remedies for Ad and Bookem

Ad and Bookem can file a suit in the court of law for the following remedies.

Damages: He can cliam the damages incurred from the partner who breached the contract by engaging in the practice before 3 years in US. He can also claim the expenses incurred for filing the suit.

Specific performance: He can also have the right to close the practice started by the partner of Sub and Div before 3 years in US.

Restitution of the contract: He also has the right to cancel the contract as one of the partners has breached the contract. Thus have the right to get all the amount paid to Sub and Div and has to surrender the company acquired from Sub and Div