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The Importance of Strong Restrictive Covenants (Pennsylvania Academy of General Dentistry’s Keystone Explorer)

Justin J. Weaver, Esquire publishes in the Pennsylvania Academy of General Dentistry’s Keystone Explorer, Spring 2017 Edition: “The Importance of Strong Restrictive Covenants: What Every Buyer of a Dental Practice Should Know.”

A restrictive covenant is a contractual provision that restricts a party’s ability to take certain specified actions. Considered in connection with the acquisition of a dental practice, there are generally two types of restrictive covenants. 

The first, a non-compete covenant, prohibits selling dentists from practicing within a specified geographical area surrounding their former practice for a specified period of time following the sale of a practice.

The second, a non-solicitation covenant, precludes the seller from soliciting or otherwise encouraging former employees, patients and referral sources to follow him or her to another practice.

These provisions allow a buyer to maintain the goodwill associated with the purchased practice, and as such, are critical protections for any buyer.

In this article, our attorney Justin Weaver lists considerations that every buyer should understand.

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