Should I Insist on a Noncompetition Agreement When Buying a Business?

When you buy a business, a noncompetition agreement, or a covenant not to compete, can help protect your interests. It can prevent the former owner from opening another competing business down the street or across town (or in the case of an Internet-related business, possibly anywhere in the world). A noncompetition agreement is typically a separate agreement, but its form is attached to and referenced within the purchase agreement.