RESTRAINT OF TRADE LAWYERS IN FOURWAYS
What Is A Restraint Of Trade Clause
The Restraint of Trade Clause, commonly found in employment contracts or shareholders’ agreements, serves as a protective measure for the employer or shareholder’s proprietary rights. These rights encompass various aspects such as trade secrets, methodologies, customer information, confidential data, software tools, and technical knowledge specific to the company and its clientele. These proprietary rights, intrinsic to the company or employer, are vital for maintaining competitiveness in the market. RecogniSing their immense value, many employers and companies incorporate restraint of trade clauses into their contracts to safeguard these proprietary assets.
What Should the Restraint of Trade Clause Specify?
The Restraint of Trade Clause should be meticulously crafted to address the following key points:
- Prohibition of employees or shareholders from engaging in work that utilizes trade secrets or proprietary information for competitive purposes, thereby safeguarding against the replication of the employer or company’s business.
- Restriction on soliciting clients from the former entity to join the individual’s new venture, ensuring loyalty and protection of client relationships.
- Prohibition of engaging in activities directly competing with the employer or company for a specified period and within a defined geographical area, maintaining market integrity.
- Specification of the geographical scope and duration of the restraint, ensuring it is not overly restrictive to the extent that it hinders future employment or shareholding opportunities.
- Establishment of a reasonable timeframe for the restraint, preventing undue limitations on future career prospects while still protecting the interests of the employer or company.
Enforceability of Restraint of Trade
In the event of a breach of the Restraint of Trade Clause by an employee or shareholder, the employer or company is entitled to various remedies, including:
- Initiating legal proceedings to enforce the clause, thereby preventing the unauthorized use of company information for personal gain.
- Imposing financial penalties on the breaching party as a deterrent.
- Seeking damages to compensate for losses incurred due to the breach. The employer or company may pursue any combination of these remedies, seeking relief through litigation if necessary.
NEED ASSISTANCE DRAFTING OR ENFORCING A RESTRAINT OF TRADE CLAUSE CONTRACT? CONTACT OUR RESTRAINT OF TRADE LAWYERS IN FOURWAYS TODAY
If you are in the process of entering into a legally binding Restraint Of Trade agreement, it is highly advisable to seek the professional assistance of a Restraint of Trade Lawyers at Burger Huyser Attorneys. Our attorneys will ensure that an agreement is drafted to suit your specific needs, as well as ensuring that it complies with the legal formalities.
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