Reference no: EM133616554

Question: Jim operates a successful wine shop in San Diego. Looking for a career change, he decides to advertise in the local newspaper for prospective buyers. A few days later, Jim receives a letter from Bill, who is interested in purchasing the wine shop. Jim and Bill discuss the sale of the business over a number of weekends, and after some negotiations, enter into an agreement for Bill to purchase the entire wine shop for $500,000. As part of the contract, Jim agrees to receive a separate $5,000 payment in exchange for a "non-competition" clause, where the parties agree that Jim shall not open another wine shop within 8 miles of San Diego for a period of one year. They also agree that if either party breaches the agreement, the breaching party will pay $50,000 in liquidated damages. Both parties sign the agreement. Six months after the sale, Jim has a change of heart, and opens a prohibition-style speakeasy 5 miles away from the wine shop that caters to an affluent crowd, many of whom are his former customers. Jim's speakeasy does not sell wine. A few weeks later, Bill sees an article in the San Diego Union-Tribune with a glowing