You’ve spent years—maybe decades—building your business from the ground up right here in New Jersey. You’ve survived the late nights, the tax hikes, and the local competition in Freehold. Now, you’re finally ready to sell and move on to whatever is next. Whether that’s a well-deserved retirement at the Shore or starting a completely different venture, the finish line is in sight.
But then, the buyer’s attorney drops a thick stack of papers on your desk. Hidden inside the asset purchase agreement is a clause that says you can’t work in your industry for the next five years. Anywhere in the Tri-State area.
It feels like a punch in the gut. You want to sell, but you don’t want to sign away your right to exist. This is exactly where a non-compete agreement business sale lawyer becomes your most valuable asset.
Look, I’m Paul Appel. I’ve seen these deals from both sides of the table for over 40 years. I know that an “off-the-shelf” non-compete can turn your successful exit into a legal prison if you aren’t careful. Let’s talk about how we protect your freedom without blowing up your deal.
When a Fair Request Becomes a Legal Leash
It makes sense why a buyer wants a non-compete. They’re paying you good money for your goodwill—basically, your reputation and your customer list. If you sold the business on Monday and opened a rival shop across the street on Tuesday, the buyer would be left holding an empty bag.
But here’s the thing… buyers often ask for way more than they actually need. They’ll try to restrict you for too long, in too large a geographic area, or from doing work that doesn’t even compete with them.
In New Jersey, courts generally dislike non-competes because they restrain trade. However, they view non-competes in a business sale much differently than those in a standard employment contract. Judges are more likely to enforce them because they assume you’re a sophisticated owner who got paid specifically for this restriction. If you sign a bad deal, a judge might not let you out of it. This is why a thorough business legal risk analysis is crucial before you put pen to paper.
The 2026 NJ Legal Landscape
As we move through 2026, the rules around non-competes are shifting. There’s a lot of talk in the NJ Legislature about banning them for most employees, but—and this is a big “but”—those bans almost always have an exception for the sale of a business.
That means as an owner, you’re still in the crosshairs. A buyer might try to use “standard” language that hasn’t been updated to reflect current NJ reasonableness standards. If your agreement is overbroad, you might find yourself in a breach of contract dispute three years from now just because you took a consulting gig in a neighboring county.
What Makes a Non-Compete Reasonable in NJ?
| Factor | What Buyers Want | What’s Actually Reasonable |
| Duration | 5 to 10 years | Usually 2 to 3 years for most NJ small businesses. |
| Geography | The entire state or Tri-State area | The actual area where you did business (e.g., Monmouth County). |
| Scope | Specifically, the services you were providing. | Usually, 2 to 3 years for most NJ small businesses. |
Narrowing the Fence
As your non-compete agreement business sale lawyer, my goal is to shrink the fence around you until it’s just big enough to protect the buyer but small enough that you can still breathe.
We do this by getting specific. We don’t just say you can’t compete. We define exactly what competing means. For example, if you sold a construction company, maybe you’re barred from general contracting in Freehold, but you should still be allowed to do high-end kitchen design or work as a consultant for a developer in North Jersey.
We also look at the asset transfer agreement to ensure you’re being fairly compensated for this restriction. If the buyer wants five years of your life, they need to pay for five years of your life.
Actionable Tips for Sellers in NJ
If you’re looking at a Letter of Intent or a draft contract right now, keep these tips in mind:
- Carve Out Your Passions: If you have a side hobby or a secondary business that doesn’t compete, name it explicitly as an excluded activity.
- Limit the Geography: If your customers were all in Freehold and Manalapan, don’t agree to a non-compete that covers all of New Jersey.
- Define the Start Date: Ensure the clock starts ticking on the day of the sale, not on the day you stop consulting for the new owner.
- Watch the Solicitation Clause: A non-compete stops you from opening a shop; a non-solicit stops you from taking your favorite employees or old clients. These need to be separate and limited.
- Don’t ignore the Boilerplate: I’ve written before about how boilerplate can ruin your day. Those generic-looking paragraphs at the end of the contract often contain the most dangerous terms.
Conclusion: Securing Your Next Big Move
Selling your business should be the highlight of your career, not the start of a legal nightmare. You’ve worked too hard to build your reputation—don’t let a poorly drafted non-compete stop you from using your skills in the future.
If you’re looking at a contract and the restrictive covenants section looks like a maze, I’m here to help you find the exit. Whether you’re in Freehold, Marlboro, or anywhere else in NJ, let’s make sure your deal is actually a done deal.
Reach out to me at paul@paulappellaw.com or stop by the office at 11 Crestwood Drive in Freehold. We’ll grab a coffee and make sure your next chapter is written on your terms.
FAQ: Quick Answers on NJ Business Sales
Can a buyer stop me from working in a different industry?
Generally, no. A non-compete must protect a “legitimate business interest.” If you move into an industry that doesn’t compete with the buyer, the restriction shouldn’t apply.
What happens if I break the agreement?
The buyer can sue for an injunction (to stop you from working) and for damages (the money they lost because of you). NJ courts take this seriously.
Can the agreement be changed after I sign?
Only if both parties agree. That’s why it is so critical to get it right before you close.
