October 14, 2024 | less than a minute read

Don't rely on paper tigers

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John Flint

Partner

Get in touch

John Flint

Partner

The extract below from my recent article is so important. As a litigator I see time and again the problems caused by directors and business owners relying on agreements or clauses which they have found on the internet or borrowed from other documents which end up providing little effective protection. The worst example I've seen being a multi million pound contract taken from an internet precedent inadvertently adopting the laws of the state of Texas!

It is particularly important in relation to covenants. A badly drafted “borrowed” clause can leave you chasing shadows with nothing to enforce.

Legal advice on drafting restrictive covenants is crucial because if a business is too greedy and a restrictive covenant is too obstructive it will become a “paper tiger” as it will be unenforceable. Restrictive covenants can, for example, be deemed unenforceable if their geographic scope is overly broad, their duration is excessively long, or their scope of activity is too expansive. It is better to have a tighter clause that the courts will enforce, than a wider clause that may only bring false comfort.