The Contract Clause That Can Shape Your Life After the Sale
Check what your noncompete covers, where it applies, and when it ends.
You may be ready to sell your business without being ready to stop being an entrepreneur. Perhaps you want to consult a few days a week, back a promising company, or help your daughter launch a business. Those possibilities belong in the sale conversation, not just in your retirement plans.
Before you sign, ask a question that can get lost behind the purchase price: Will this agreement leave room for the life I want next?
In Your Multimillion-Dollar Exit, I explain that purchase agreements contain promises called covenants. One may be a seller's promise not to compete with the buyer for a specified period. The details matter: the business activities covered, the territory, and the duration.
The buyer wants to protect what it is buying. Your goal is to understand that protection without casually giving up opportunities you meant to keep. Start with asking a few questions.
1. What counts as competing?
Imagine you sell a commercial landscaping company and later want to advise a garden-design startup. Would the proposed restriction cover that work?
You won’t get the answer from the job title alone. Ask your lawyer to test the activity against the agreement's wording. Does it cover consulting, employment, ownership, or investing? Are there negotiated exceptions for a small passive investment or a business that you already own?
My advice is to try to limit the noncompete to your existing business and customers. Ask whether the draft reaches beyond what you are selling into other businesses or markets the buyer serves. Bloomberg Law's analysis likewise emphasizes tying restrictions to the acquired business and its protectable interests (Bloomberg Law).
2. Where does it apply, and when does it end?
Ask your lawyer to explain both boundaries in plain English. Which locations are covered? When does a “restricted period” begin and end under the proposed contract’s wording?
Don’t accept “that's standard” as a substitute for understanding the deal. You want a time period you can live with and a territory that fits your future business plans are negotiation questions, not details to discover after closing.
3. Which other promises affect your plans?
The noncompete is not the only provision to review. My book also identifies promises about not soliciting customers or employees and keeping information confidential. Review these agreements and ask how those separate restrictions would affect your life after the sale, even if the noncompete doesn’t affect you.
And do not assume headlines about reversing a federal ban make this review unnecessary. As of November 2, 2026 the FTC states that its Noncompete Rule is not in effect and is not enforceable (FTC).
4. Negotiate your next chapter before you sign
Tell your transaction lawyer what you may want to do after the sale, not simply that you plan to “stay busy.” Ask which activities the draft sale agreement permits, which it restricts, and which need an express exception.
That conversation does not guarantee every request will be accepted. It helps you decide what matters before you commit to selling your company.
The sales price deserves your attention and so does the freedom you want to have after the sale.