A non-compete and non-disclosure for a non-employee??

Sort of a non-compete, but I am not an employee. I am looking into buying a LP company in California from the general partner. As part of my due diligence process, I asked him to furnish his tax and partnership returns, his property lease agreement, and equipment warranties. He would not permit me to review anything unless I signed a non-compete statement that said I would not own, finance, provide guidance, discuss, be a partner in (in essence have nothing whatsoever to do with), etc. a similar type business within 15 miles of the existing business, and for a period of 10 years, because he was divulging certain financial information, trade secrets, business practices, etc. If breached, the compensation would be $1,000,000.

He wouldn't sign the agreement I drafted up, so if I didn't sign his, I would not have access to this information. Is a contract that is so restrictive binding? Can it be for so far a distance and for so long a time? Is it even reasonable? Did he "force" me to sign by not allowing the process to go forward without signing?

Based on laws that I have reviewed, most apply to employment non-compete agreements and non-disclosure agreements...I am neither an employee or a person that has any relationship with the General Partner, except that I was evaluating his business for potential purchase....by the way, there really were no trade secrets...all that he did provide is common knowledge that is available, and readily accesible, on the internet or through his own web site...

1 answer  |  asked Jul 31, 2006 11:00 PM [EST]  |  applies to California

Answers (1)

Janet M. Koehn
retain an attorney

dear sir,
to do the kind of things you are doing right now without an attorney retained to examine documents presented to you for signature, to draft documents that are supposed to be binding contracts, and otherwise fool around is just plain dumb.

you indicate you are not willing to even pay an attorney for a consultation.
what you are entering into requires particularized legal advice, based on the specific facts of your situation and an examination of (and perhaps expertise in) the industry you are in, as well as knowledge of relevant statutory and case law. spend the $$ or as they say, you will get what you pay for.

posted by Janet M. Koehn  |  Aug 1, 2006 02:25 AM [EST]

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