anti competition clauses
Discussion
Clauses that are too general and far reaching are not enforceable.
For instance, if the clause said you couldnt product financial software in Burnley for 3 months then that would hold water.
If it said you cant produce software anywhere in Europe until the day you die that wouldnt.
Anything expecting to dictate terms over a number of years I would suggest is on shaky ground.
For instance, if the clause said you couldnt product financial software in Burnley for 3 months then that would hold water.
If it said you cant produce software anywhere in Europe until the day you die that wouldnt.
Anything expecting to dictate terms over a number of years I would suggest is on shaky ground.
How tight is the definition of the subject area?
As I understand it something like 12 months would be the limit of an anti-competition clause.
Actually of course they can put whatever they like in the contract - what matters is how a court would view it in the event that you breach the condition and they take action against you.
As I understand it something like 12 months would be the limit of an anti-competition clause.
Actually of course they can put whatever they like in the contract - what matters is how a court would view it in the event that you breach the condition and they take action against you.
need to differentiate between two types of restrictive covenant clauses:
in employment contracts - these are viewed quite narrowly as the former employee must be entitles to work question - does the rstriction stop you carrying on your trade? if so, then probably unenforceable.
in business sale contracts - whilst the courts have been known to strike out clauses that are extremely wide, they do take into account that the covenantor has sold his business and therefore gained a benefit for entering into the covenant. The clause is there as protection for the goodwill of the company he sold and will be enforceable only to the extent that it does that. a clause preventing someone from selling widgets in France, when the company sold only sells widgets in England would probably be unenforceable. However, global restrictions on software developers and the like where location is irrelevant tend to be enforced more.
Try to beat them down a bit, but you will need to accept that they don't want to pay for a business and have you set up in competition the next day - it's a legitimate and reasonable ask.
in employment contracts - these are viewed quite narrowly as the former employee must be entitles to work question - does the rstriction stop you carrying on your trade? if so, then probably unenforceable.
in business sale contracts - whilst the courts have been known to strike out clauses that are extremely wide, they do take into account that the covenantor has sold his business and therefore gained a benefit for entering into the covenant. The clause is there as protection for the goodwill of the company he sold and will be enforceable only to the extent that it does that. a clause preventing someone from selling widgets in France, when the company sold only sells widgets in England would probably be unenforceable. However, global restrictions on software developers and the like where location is irrelevant tend to be enforced more.
Try to beat them down a bit, but you will need to accept that they don't want to pay for a business and have you set up in competition the next day - it's a legitimate and reasonable ask.
therealpigdog said:
need to differentiate between two types of restrictive covenant clauses:
in employment contracts - these are viewed quite narrowly as the former employee must be entitles to work question - does the rstriction stop you carrying on your trade? if so, then probably unenforceable.
in business sale contracts - whilst the courts have been known to strike out clauses that are extremely wide, they do take into account that the covenantor has sold his business and therefore gained a benefit for entering into the covenant. The clause is there as protection for the goodwill of the company he sold and will be enforceable only to the extent that it does that. a clause preventing someone from selling widgets in France, when the company sold only sells widgets in England would probably be unenforceable. However, global restrictions on software developers and the like where location is irrelevant tend to be enforced more.
Try to beat them down a bit, but you will need to accept that they don't want to pay for a business and have you set up in competition the next day - it's a legitimate and reasonable ask.
The above hits the nail on the head, all relates to the purchaser preserving the goodwill they have just bought. If you have something specific you want to do speak to the purchaser and get it carved out.in employment contracts - these are viewed quite narrowly as the former employee must be entitles to work question - does the rstriction stop you carrying on your trade? if so, then probably unenforceable.
in business sale contracts - whilst the courts have been known to strike out clauses that are extremely wide, they do take into account that the covenantor has sold his business and therefore gained a benefit for entering into the covenant. The clause is there as protection for the goodwill of the company he sold and will be enforceable only to the extent that it does that. a clause preventing someone from selling widgets in France, when the company sold only sells widgets in England would probably be unenforceable. However, global restrictions on software developers and the like where location is irrelevant tend to be enforced more.
Try to beat them down a bit, but you will need to accept that they don't want to pay for a business and have you set up in competition the next day - it's a legitimate and reasonable ask.
Thanks people. This has all been very helpful.
The clause would I think hinder my normal means of employment if for example I was offered work in a similar area of software development but unable to take it. It is also striving to restrict me world-wide which I do think is a bit strong.
The clause would I think hinder my normal means of employment if for example I was offered work in a similar area of software development but unable to take it. It is also striving to restrict me world-wide which I do think is a bit strong.
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