A question about a contract i signed

[h12f17]

Hi
I worked for a company as a independent contractor, and signed a contract with them ,there is this term in the contract that is bothering me, because lately I found out the service and product they provide is not good at all, I keep getting calls from my clients, and i found out that out there there is better offers for working as independent contractor, I want to start a company to sign a contract with another company and terminate this one, but there is this term, can someone tell me if it is legal to keep me out from a industry? and because this is in effect of anyway this contract is terminated, meaning if they change the pricing of product that is given to us, we have rights to terminate to contract right away, but still this term will be in effect, if there is any lawyer that can consult me about this contract please let me know, I am really lost right now, thanks

"ISO further covenants and agrees that for a period of twelve(12) months after expiration or termination of this Agreement, regardless of the cause of termination, except as otherwise approved in writing by (the company), it will not, either directly or indirectly, for himself or through, on behalf of, or in conjunction with any person, persons, partnership or corporation, own, maintain, operate, engage in, be concerned with, lend money to, guarantee the debts of or premit his name to be used or employed in connection with, carray on or be engaged in or in any other manner whatsoever have any interest in or advise, whether as employee, owner, investor, partner, shareholder, director, officer or otherwise, any business engaged in the provision of (the company)'s services, within a radius of one(1) Kilometer from (the company)'s head office or any of(the company)'s clients"

[Frankie3s]

Hi
I worked for a company as a independent contractor, and signed a contract with them ,there is this term in the contract that is bothering me, because lately I found out the service and product they provide is not good at all, I keep getting calls from my clients, and i found out that out there there is better offers for working as independent contractor, I want to start a company to sign a contract with another company and terminate this one, but there is this term, can someone tell me if it is legal to keep me out from a industry? and because this is in effect of anyway this contract is terminated, meaning if they change the pricing of product that is given to us, we have rights to terminate to contract right away, but still this term will be in effect, if there is any lawyer that can consult me about this contract please let me know, I am really lost right now, thanks

"ISO further covenants and agrees that for a period of twelve(12) months after expiration or termination of this Agreement, regardless of the cause of termination, except as otherwise approved in writing by (the company), it will not, either directly or indirectly, for himself or through, on behalf of, or in conjunction with any person, persons, partnership or corporation, own, maintain, operate, engage in, be concerned with, lend money to, guarantee the debts of or premit his name to be used or employed in connection with, carray on or be engaged in or in any other manner whatsoever have any interest in or advise, whether as employee, owner, investor, partner, shareholder, director, officer or otherwise, any business engaged in the provision of (the company)'s services, within a radius of one(1) Kilometer from (the company)'s head office or any of(the company)'s clients"

You definitely need to consult a lawyer but the answer is probably no. This clause is quite standard (although worded detrimentally in many IT contracts). The paragraph is pretty iron clad. Anything you gain from working with your existing client is theirs for a period of 1 year. This last sentence is worded very cleverly,

"any business engaged in the provision of (the company)'s services, within a radius of one(1) Kilometer from (the company)'s head office or any of(the company)'s clients"

Which I'm sure you're contemplating and will be in violation of. If you are on friendly terms with your existing client and they are OK with you leaving you should get a letter from them absolving you from the agreement you had and this paragraph. However the chances of the company doing this without benefit is slim.

You should still go and consult with a lawyer to find out exactly what are your legal rights. Your entire contract with this firm will need to be reviewed and you should do nothing until you obtain such legal advice.

[ghostryder]

A non-competition agreement, especially in the technology sector, should be crafted in such a manner that its restrictions with respect to time, territory (geographic or otherwise), and activity are reasonably well thought-out. It must also conform to local laws, which can vary from one jurisdiction to the next. Otherwise, it will not be enforced by a court.

http://www.heydary.com/publications/non-competition-agreements.html

There have been a few court decisions that have been very critical of overly broad non-compete/restrictive covenant provisions in contracts. This is definately a issue that should be discussed with a lawyer with expertise in this area.

[h12f17]

Thanks for the reply guys, but this is actually only a Point of sale system seller company, I am only a sales for them, I am not planning to steal the clients that I've contact through there, it's just I want to start a company to sell similar product, but with lower cost and better service from another company, I signed this contract as a indiviual, no company formed whatsoever, any opinions will be thanked, I do know I will have to consult a lawyer eventually.

[slavka012]

Thanks for the reply guys, but this is actually only a Point of sale system seller company, I am only a sales for them, I am not planning to steal the clients that I've contact through there, it's just I want to start a company to sell similar product, but with lower cost and better service from another company, I signed this contract as a indiviual, no company formed whatsoever, any opinions will be thanked, I do know I will have to consult a lawyer eventually.

Don't waste your money on lawyers. Non-compete clauses are generally non-enforceable . But this one is peculiar - they limit it's effect to 1km radius from their office. So it may stand. Just rent your office farther than 1km from their office and you'll be fine.

ps./ Ah, I did not notice "or from any companies clients". I'm pretty sure it's not gonna stand -- you have no way of knowing all of their clients.

But it was silly of you to sign it and ask questions later. It usually works better the other way around. :)