E-Commerce Services - enforcing non-competes

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by a searcher from University of South Carolina - Darla Moore School of Business
in Charleston, SC, USA

2yrs ago

E-Commerce Services - enforcing non-competes

Looking at an online service business for sale which has a large overseas operations. One of the Sellers is a foreigner and one is American. I'm wondering how e-commerce deals typically enforce a non-compete. It seems like it would be very easy for the seller to maintain the customer and employee names and then start up under a different brand, and it's possible the Buyer wouldn't even know it's happening. It would then be nearly impossible to enforce any kind of non-compete in such a situation.

How do people in the e-commerce space guard against the ease of evading a non-compete?

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reply by an investor 2yrs ago
from University of Alberta in Vancouver, BC, Canada

If you have the ability to engage in seller financing, handling some of the purchase price over a period of 2 or 3 years, the Purchase and Sale Agreement (PSA) can address it through representations and warranties. I'm not a lawyer, but I've implemented similar protective measures; it's advisable to consult with your legal counsel for confirmation.