Hamrick v. Kelley

392 S.E.2d 518, 260 Ga. 307

• Court: Supreme Court of Georgia
• Decided: June 21, 1990
• Docket: S90A0476
• Status: Published

Opinions

Clarke, Chief Justice.

This is an action to enforce a covenant not to compete contained in a contract for the sale of a business.¹ Among other things, the covenant prohibited competition by the sellers “in a seventy-five (75) mile radius of the Metro Atlanta, Georgia area.”

The trial court held the restricted area to be too vague to be enforceable but “blue penciled” the covenant and enjoined competition within a fifty-mile radius of Winston, Georgia. We reverse.

A trial court may apply the “blue pencil” method where a covenant not to compete ancillary to a contract for the sale of a business designates an area greater than reasonably necessary to protect the purchaser. In such circumstances the court may enjoin the seller “from competing in only so much of that area as it finds from clear and convincing evidence is essential to protect the buyer.” Jenkins v. Jenkins Irrigation, Inc., 244 Ga. 95, 101 (259 SE2d 47) (1979). However, we hold that a trial court may not under the guise of the “blue pencil” method reform a contract which is otherwise unenforceable by reason of vagueness.

The restriction sought to be imposed here is upon competition in a seventy-five mile radius of the Metro Atlanta, Georgia area. We find that such a radius is impossible to define because there is no clear definition of the area comprising Metro Atlanta, Georgia. We are unable to ascertain whether it means the Standard Metropolitan Statistical Area designated by the United States Census Bureau which changes over time, the counties comprising the Atlanta Regional Commission, or some other geographic designation. For this reason, the contract must fall for lack of clarity in delineating the area restricted from competition. While unreasonableness as to area may be corrected by the “blue pencil” in a contract for the sale of a business, we find no law authorizing such a “blue pencil” correction for vagueness.

The “blue pencil” marks, but it does not write. It may limit an area, thus making it reasonable, but it may not rewrite a contract void for vagueness, making it definite by designating a new, clearly demarcated area. The remedy for vagueness is an action for reformation and not a .suit for injunction to enforce the contract. In this case the pleadings contain no prayers for reformation, and we are oifered no indication that there is any evidence as to intent that might warrant a reformation of the contract. The change of the center of the restricted area from Metropolitan Atlanta to Winston, Georgia, could only be accomplished by reformation.

Judgment reversed.

All the Justices concur, except Benham, J., who dissents.

1 We note that the General Assembly has addressed the area of restrictive covenants by the enactment of HB 744, Ga. L. 1990, p. ._et seq., codified as OCGA § 13-8-2.1, effective July 1, 1990.