Is a restrictive covenant for the sale of a dental practice business unenforceable?

Alberta, Canada


The following excerpt is from Community Credit Union Ltd. v. Ast, 2007 ABQB 46 (CanLII):

In Blunt v. De Palma, [2005] B.C.J. No. 1530 (S.C.), Taylor J. considered several covenants similar to those at issue here in the context of an agreement providing for the sale of a denturist business. The agreement contained a ladder-type restrictive covenant which provided for a range of periods of years from five to one and a geographical range decreasing in 5 kilometre increments from 20 to 5. The agreement provided that each provision was declared to constitute a separate and distinct covenant. It further provided that the covenantor/plaintiff agreed that the restrictions were necessary and fundamental to the protection of the business and that all defences to the strict enforcement of the obligations were waived. The plaintiff brought an application for a declaration that the restrictive covenant was unenforceable on the basis that it was void for uncertainty.

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