Why the fine print in your sale agreement deserves more than a rubber stamp
If you’ve ever sold a business, or plan to, you’ve almost certainly signed (or will sign) a non-competition and non-solicitation clause as part of the deal. It’s standard practice. The buyer wants assurance that the moment the ink dries, you won’t turn around and open a competing shop down the street or start calling your old customers. Most sellers treat this section of the agreement as boilerplate, something the lawyers handle, worded the same way it’s always been worded.
A recent Alberta Court of King’s Bench decision is a reminder that “the way it’s always been worded” isn’t good enough.
In Intellimedia Limited Partnership v. Jawad, 2026 ABKB 247, a buyer went to court trying to enforce both a non-competition clause and a non-solicitation clause against a seller who had gone on to start a competing venture. The non-competition clause held up. The court found it clear enough, properly limited in time, scope, and geography, and enforced it.
The non-solicitation clause did not survive. The court found the language defining exactly which customers the seller was barred from contacting was too vague to actually enforce. It wasn’t a bad-faith drafting job or an unusual case, it was the standard-form wording found in agreements all the time. Due to this, it was ambiguous about who it actually covered thus the court declined to enforce it at all, leaving that entire piece of the buyer’s protection worthless.
This matters more than it might seem on the surface. Ambiguous drafting doesn’t just weaken a clause, it changes who bears the risk once a dispute starts. A buyer can pay for protection that turns out not to exist the moment it’s tested. A seller can end up bound by language broader, longer, or vaguer than they ever intended, held to exactly what the words say, regardless of what either side actually meant. Either way, the outcome hinges on precision that neither party thought to question until it was too late.
The Legal Gray Zone Behind These Clauses
Restrictive covenants in a business sale live in an odd legal space. Courts treat non-competes signed as part of selling a business very differently than non-competes signed as an employee, they’re presumed reasonable and enforceable, because two sophisticated parties negotiated the value of the business itself around that promise. That’s a meaningful legal advantage compared to employment law, where non-competes are viewed with heavy suspicion.
But that presumption only protects you if the clause is actually well drafted. Courts will still strike down language that’s ambiguous about time, geography, scope of business, or, as in this case, exactly who counts as a “customer.” A clause that looks perfectly standard to a business owner reading it can be exactly the kind of imprecise wording that unravels the moment it’s tested.
Why This Isn’t a Job for a Generalist
It’s tempting, especially in smaller and mid-sized transactions, to have a general practice or corporate lawyer to “handle the paperwork” on a sale, or to lean heavily on templates from a previous deal. A non-compete clause reads like plain English. It feels like something that doesn’t need much scrutiny.
But cases like this one show exactly why that instinct is expensive. A lawyer who specializes in M&A and transactions:
- Knows how courts in your specific province have been interpreting these clauses recently, because that interpretation shifts, as this case shows.
- Drafts scope language (customers, geography, competing activities) precisely enough to survive a challenge, not just language that sounds sufficient.
- Understands the difference between a clause that protects the goodwill you’re actually paying for and one that’s needlessly broad, which can create its own enforceability problems.
- Catches the gap between what the parties intended and what the contract actually says, before it becomes a dispute instead of after.
The cost of a specialized M&A lawyer reviewing and tightening these provisions is a rounding error compared to what either side stands to lose if the clause meant to protect a multi-million dollar transaction turns out to be unenforceable.
The Bottom Line
Whether you’re the one selling a business or the one buying it, a non-compete or non-solicitation clause is only as good as its drafting. “Standard language” is not the same as “sound language.” If you’re heading toward a sale, this is one of the clearest reasons to bring in a lawyer who does this work for a living, not because the deal is complicated, but because the clause everyone assumes is simple is exactly where deals quietly come undone.
