“Common in veterinary practice transactions, restrictive covenants are designed to prevent the seller from soliciting clients and competing with the buyer after the sale. Through such restrictions, buyers aim to protect themselves and ensure that the acquired business does not lose value due to the seller’s re-entering the market. To fulfill those objectives, a purchase agreement’s restrictive covenants should be negotiated, clearly stated, endure for a reasonable period (for example, two to five years) and be practical in geographic scope.”
Chair of the National Veterinary Law Group at Mandelbaum Barrett PC, Peter Tanella, Esq. authors a regular column in Today’s Veterinary Business called “Legal Lingo.” In the current February/March 2022 issue, his article titled “Stay Away, Please” discusses how restrictive covenants serve a critical purpose in a newly purchased clinic’s continued success.