Checklist for Reading a Seller Non-Compete against a Non-Solicit on a Share Sale

Before you sign, read the seller non-compete beside the non-solicit, and decide whether to accept the set, narrow it, or walk.

Name the goodwill just sold, and list who is paid, before you treat a share-sale label as permission to ban the buyer's wider group. Split the four limbs before you read a passive order as already banned. English law applies, and the courts are those of England and Wales.

Disclaimer: Checkory provides AI support, not legal advice. Consult a qualified lawyer for binding decisions.

Why is the protected interest the goodwill just sold?

The protected interest is the goodwill just sold, not every company the buyer already owns. Write it into the clause, and check each named seller against who is paid. A seller who is paid nothing is not yet under the looser vendor reading, so do not call that person unbound.

Nordenfelt concerns a seller who could open a rival the next day. Macfarlanes says the interest should be named, usually goodwill. Walker Morris notes that Allied Dunbar needed a payment for that goodwill. On this draft, mark a full payment and a nil payment separately.

How do you keep non-compete, non-solicit, non-deal, and non-poach apart?

Keep non-compete, non-solicit, non-deal, and non-poach as four limbs, and say what each one covers. A non-solicit stops the seller seeking business. A non-deal also stops an order the customer places without being asked. If the draft only says solicit, do not read it as a ban on a passive order.

Lewis Silkin uses these labels on a share purchase agreement (the contract that sells the shares) and often limits a UK non-poach to key employees. Walker Morris on Ivy treated poaching any employee as a serious concern.

A typical mistake is to import words the draft does not use. Burton J quoted another agreement that said solicit or knowingly accept. If your draft does not say that, do not read this draft as if it did.

Which business does the non-compete actually cover?

The non-compete covers the business just sold, not a trade the seller never ran. The risk is another group company still inside the limb after the mark-up. Walk that limb. Do not wait for a court to cut it down.

In Literacy Capital plc v Webb the injunction was refused: the covenants reached the buyer's other businesses. Baker McKenzie calls non-competes very common, which is not a reason to widen the group. The Commission Notice is not an English law limit. The periods it states are up to three years, or two years if only goodwill passes.

How long, and where, may the restraint run?

Set duration and geography to where the business just sold operated. Note a wider territory, a non-compete longer than the non-solicit, and one period used for every limb. That note is not a finding that the covenant is void.

Lewis Silkin says more than three years is unlikely, and often unenforceable, depending on the business. Birketts, Macfarlanes and Brodies treat two to three years as a market note, not a statute.

In Webb the injunction failed. The period was about ten years, the area was the UK and Channel Islands, and the evidence came from only two eastern counties. Faegre Drinker says Rush Hair's two years on a sale would almost certainly fail in employment. Walker Morris on Ivy says five years needed its own justification, and that does not void this clause.

What stays off garden leave and the pre-completion gap?

These restraints start at completion. They are not garden leave, not a payment in lieu of notice, and not an employment duration cap. They do not cover the morning before completion when exchange and completion happen together.

Gibson Dunn, 9 October 2026 says no statutory employment cap is in force, and the alert is about employees and garden leave. Lewis Silkin notes an earlier three-month employment proposal, described as not applying to share purchase agreements. Neither note caps this sale.

Employment covenants, garden leave, and payment in lieu belong in the employment contract. An employee non-solicit in a services contract, and a customer non-solicit in a trading contract, are different clauses. Severability is a different review. Gap undertakings apply only when exchange and completion are apart. Non-circumvention of an end customer is a different bargain.

A vacated United States rule on the Federal Trade Commission page is not in effect. The Supreme Court press summary in Cavendish v Makdessi did not hold that a long non-compete was reasonable. Neither text widens this draft.

When do you accept, narrow, or walk?

Accept only when goodwill, payees, four limbs, customer lookback, key people, activity, and geography match the business sold. Narrow the parts you can still tie to the business sold. Walk if a covenant still restrains a business the seller did not sell.

This checklist does not find the covenant void, and it does not ask a court to rewrite the wide words. Walker Morris says a court will not add words.