This week an Ohio appellate court was confronted with a case involving the sale of a dental practice in which part of the sale price was allocated towards goodwill. The sale also included an express non-compete provision. Interestingly, the appellate court noted that even absent the non-compete provision, the sale of goodwill prevented the seller from advertising his services in direct competition with the purchaser after the sale. Ultimately, the case was sent back to the trial court for reconsideration.
Not only was the selling dentist pulled into litigation with the purchaser, but the new employer of the selling dentist was also sued. The purchaser, the seller, and the new employer had to pay attorneys for a trial, an appeal, and now further proceedings in the trial court. The lesson, as always, is when selling a business it is important to make sure the contract and accompanying documents are well drafted.