Brace Yourself: Court of Appeal for Ontario Upholds Non-Compete in Transfer of Dental Practice

In many industries, such as healthcare, consulting, and professional advisory services, client relationships and goodwill are integral to the value of the business. Upon a business sale, the purchaser will need time to build trust with clients, and reasonable restrictive covenants are essential to preserving the value of the business while ensuring that the purchaser gets what they bargained for.

But what is “reasonable” as a restrictive covenant in the realm of business sales?

In this blog post, we look at the recent decision by the Court of Appeal for Ontario in Dr. C. Sims Dentistry Professional Corporation v. Cooke, 2024 ONCA 388, 172 OR (3d) 376 [Sims], where the Court provides insights into this question and on the broader enforceability of restrictive covenants in commercial agreements.