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Not all Restraints of Trade are Enforceable

Posted by Elizabeth Gore-Jones on 18 June 2019

Not all restraints of trade are enforceable.

Some matters that may impact the enforceability of a restraint include:

1. in the case of a franchise, did the franchisee operate from the same premises or do the same type of work before entering into the franchise?

2. what is the restraint protecting?

3. will the restraint stop the "restrainee" from earning a living?

4. is it against public policy?

5. can the protected party be protected in some other way?

6. is it reasonable?

7. who do the customers or clients "belong to"?

8. was the restrainee compensated?

9. the drafting of the restraint of trade clause itself.

Restraint clauses can greatly impact decisions parties make about their future.

 

Author: Elizabeth Gore-Jones
About: 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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Tags: Business Franchisee Franchisor

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