Lee/Musgrave [1993] IECA 147 (18th November, 1993)

Lee/Musgrave [1993] IECA 147 (18th November, 1993)

A non-compete clause of up to two years, limited to a five-mile radius and confined to the cash and carry business, is not in breach of section 4(1) of the Competition Act, 1991, as it does not exceed what is necessary for the transfer of goodwill.

Citation
[1993] IECA 147
Parties
Vendor: Lee & Company Limited; Purchaser: Musgrave Limited
Jurisdiction
Ireland
Procedural Posture
Competition Authority Notification / Decision on Notified Agreement
Outcome
Certificate granted; agreement does not offend section 4(1) of the Competition Act, 1991 as amended.
Legal Topics
Non Compete Clauses, Merger Control, Restrictive Covenants, Sale of Business
Competition Law Non Compete Clauses Merger Control Restrictive Covenants Sale of Business

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Parties

Lee & Company Limited

Vendor

Musgrave Limited

Purchaser

Procedural Posture

Competition Authority Notification / Decision on Notified Agreement

Legal Issues

  1. 1 Whether the non-compete clause in the sale agreement offends section 4(1) of the Competition Act, 1991
  2. 2 Whether the duration and geographic scope of the non-compete clause are justified for the transfer of goodwill

Ratio Decidendi

A non-compete clause of up to two years, limited to a five-mile radius and confined to the cash and carry business, is not in breach of section 4(1) of the Competition Act, 1991, as it does not exceed what is necessary for the transfer of goodwill.

Court Disposition

Certificate granted; agreement does not offend section 4(1) of the Competition Act, 1991 as amended.

Orders

  • The Competition Authority certifies that the agreement, as amended to reduce the non-compete period to two years, does not offend section 4(1) of the Competition Act, 1991.