To Be Valid An Agreement Not To Compete Must Be Ancillary To A Legitimate Bargain
According to the Common Law, it is common knowledge that contracts that would interfere in the administration of justice or that require a public official to breach a public obligation are void and unenforceable. Examples of such contracts are numerous: hiding or aggravating a crime, paying for a witness` testimony in court, depending on the court`s decision to suppress evidence by paying a witness to leave the state, or destroying documents. For example, in an unbuildable case in Arkansas, a player sued a district court judge to recover 1,675 $US allegedly paid to the judge as protection money, and the Arkansas Supreme Court upheld the dismissal of the lawsuit and said, “The law will not help any of the parties to the alleged illegal and non-legal contract.” but will leave them there, where she finds it. if they were equally aware of the illegality. Womack v. Maner, 301 P.W.2d 438 (Ark 1957). This category also includes bribes, agreements to obstruct or delay justice (manipulation by jury, abuse of legal process), etc. A first common area where a trade restriction problem may arise is the sale of a business. Regina sells her lingerie shop in Victoria and promises not to create a competing boutique in town for a year. Victoria Regina`s goodwill (the fact that customers are used to shopping) as well as her building and inventory, there is clearly a property interest that needs to be protected. And the geographical restriction (“in the city”) is reasonable when the store does business there. But if Regina had agreed not to operate a store in the city or to wait ten years before opening a new store, or not to open a new store somewhere a hundred miles from the city, she could avoid the non-compete conditions of the contract, because the restriction in any case (nature, duration, and geographical area of detention) would have been wider than necessary, to protect Victoria`s interests. Whether the courts maintain an agreement not to compete depends on all the circumstances, as the Connecticut hairdresser found in section 12.5.3 “Impitoyability.” The types of contracts or bargains that could be deemed illegal are innumerable and limited only by the ingenuity of those who try to go too far. If a non-compete obligation is found to be illegal, courts can take one in three courses to remedy it.
A court may refuse to enforce the entire agreement, which now frees the worker from competition. The court could only remove the unreasonable part of the agreement and enforce the rest (the “blue pencil” rule). In some states, courts have moved away from this rule and have effectively rewritten the offensive clause themselves. Since the parties intended to introduce some form of restriction of competition, a reasonable change would lead to a fairer result. Raimondo v. Van Vlerah, 325 N.E.2d 544 (Ohio 1975). Scruples can occur procedurally or materially. A term is procedurally unscrupulous when it is imposed on the “weaker” party because of a fine or discreet impression, an unexpected placement in the treaty, a lack of opportunity to read the term, a lack of education or refinement precluding understanding, or a lack of equality of bargaining power. Ruthless material occurs when the conditions concerned are repressive and harsh, when the notion of a party deprives any real recourse in the event of an infringement. Most of the time – but not always – the courts find unscrupulous contracts in the context of consumer transactions and not in the context of commercial transactions. In the latter case, the parties tend to be demanding businessmen capable of looking after their own contractual interests. The general rule is one of the reasons: not all trade restrictions are illegal; be unreasonable.
As the restatement says: “Any promise relating to business relations or to a professional activity or other assets acts as a restriction in the sense that it limits the future activity of the promisor . . .