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Sarah King Employment Solicitor

restrictive covenant draftingThere is a familiar legal concept, which is that the Court can delete parts of a restriction to make it enforceable.  The High Court has taken this a step further in the recent decision of Prophet Plc v Huggett [2014] where the Court read words into the restrictive covenant to produce a commercially sensible result.  In this case, the employer had drafted a 12 month non-compete restrictive covenant which if read literally offered the employer no protection at all.  The clause was drafted in such a way that it could be read that he could as a sales manager not be engaged or employed in connection with any products he was involved in during his employment.

In this case, no competitor would ever be selling the employer’s products and as such the clause was rendered useless.  The Court was however prepared to treat this as a drafting error and correct it by looking at what a reasonable person would have understood the parties to have meant.  The Court then went on to uphold the restriction as re-drafted.  It said that there was a legitimate interest to protect and that the non-solicitation and non-dealing covenants even coupled with the restrictions on confidential information would not provide sufficient protection on their own.

This brings an interesting dimension to those advising on restrictions in contracts that have already been drafted.  It is clear that this case may require us not only to advise on what is written in the contract but what it could be extended to mean if the clause is poorly written.

(Our news section brings you the latest news on published judgments and cases which are all in the public domain. We only comment on these published cases and not cases of our actual clients. Publication of the case or comments is a public service designed to make the courts and tribunals more accessible and ensures justice is seen to be done. This is why court and tribunal judgments are published publicly.)