Posted by Elizabeth Gore-Jones
on 10 June 2019
Many people are confused about how cascading clauses work.
A cascading clause is often used for restraints of trade. They look something like this:
Restraint period:
(a) 3 years
(b) 2 years
(c) 12 months
And, Restraint area:
(1) Australia
(2) Queensland
(3) Brisbane.
They work like this:
-
many courts do not have the power to rewrite clauses but they do have the power to strike clauses out
-
courts will only enforce a restraint of trade to the extent that it is reasonable
-
The franchisor or employer will try to enforce the longest period and the greatest area
-
if the court is of the view that the longest period and/or the greatest area are excessive then the franchisor or employer will work their way down the list of combinations until the court rules that the period and area combination are enforceable
You should seek advice about the effectiveness and enforceability of these restraints whether you are the franchisor or franchisee, employer or employee or any other party affected by these clauses.
Author:Elizabeth Gore-JonesAbout: Elizabeth specialises in franchising law. She lectures at Bond University PLA in franchising, she sits on the Queensland Law Society Franchising Committee, she is a past member of the Women in Franchising committee and a past member of the Franchise Council of Australia.
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