Appellant competitor challenged an order

Appellant competitor challenged an order of the Superior Court of Alameda County (California), which held that respondent business owners were entitled to damages in their breach of contract action.

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Overview

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The trial court awarded damages to the business owners in their breach of contract action against the competitor as to the competitor’s resumption of a rival business. The court affirmed that judgment on appeal. The court reasoned that the business owners’ complaint was sufficient even though it did not allege nonpayment because the contract was an agreement not set up a rival business, and that agreeing to pay damages in the case of a breach was merely incidental. The court also held that the contract’s violation of Cal. Civ. Code § 1674 by not limiting the restriction to a specified county, city, or a part thereof did not preclude the business owners from collecting the damages that they sought because the rival business was established in a portion of the described territory that § 1674 did not exclude from the contract’s terms. The court further concluded that the competitor’s decision to resume his rival business where he formerly conducted business, which was close to where the business owners conducted the same business, affected the actual damages that the business owners suffered.

Outcome

The court affirmed a judgment in the business owners’ favor in the breach of contract action that they filed against the competitor as to his resumption of a rival business.