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Contract II Outline for Final Exam

Contract II Outline for Final Exam - I Non Compete...

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I. Non- Compete Agreements NON-COMPETE R2d § 188 A promise to refrain from competition that imposes a restraint that is ancillary to an otherwise valid transaction/relationship is an unreasonably restraint of trade if : The restraint is greater that is needed to protect the promisee’s legitimate interest , or The promisee’s need is outweighed by the hardship to the promisor & the likely injury to the public Promises imposing restraints that are ancillary to valid transaction/relationship include: A promise by the seller of a business not to compete with the buyer in such a way as to injure the value of the business sold; A promise by an employee or other agent not to compete with his employer and or other principal; A promise by a partner not to compete with the partnership Courts do not like these agreements b/c it restricts a persons right to employment There must be a legitimate protected business interest that needs to be protected Specific knowledge of the Business -- Trademarks, or technical knowledge, trade secrets Customer list Good will of the business Specific training Professional services or extraordinary or specialized training Legitimate interest must then be weighed against the hardship of the employee (3 factors) 1. Reasonableness of the geographic scope 2. Duration of the covenant -- How do we determine what is reasonable? Fl St. provides presumptions b/w 6 months and 2 years 3. Scope of what is prohibited -- These must be reasonable to in relation to the legitimate business interest. The stronger the business interest the larger the scope. Courts can strike parts of the agreement and re-write it to make it reasonable (in Fl this is required ), or they can strike that part altogether Fl. St. 542.335 -- Restrictive covenants in Ks are not prohibited if they are reasonable in time, area, & line of business. Any action concerning enforcement of a restrictive covenant: A court shall not enforce a restrictive covenant unless it is set forth in a writing signed by the person against whom enforcement is sought . The person seeking enforcement of a restrictive covenant shall plead & prove existence of 1 or more legitimate bus. interests justifying restrictive covenant .   The term "legitimate business interest" includes , but is not limited to: Trade secrets -- means information which
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Derives independent economic value , actual or potential, from not  being generally known to, & not being readily ascertainable by  proper means by, other persons who can obtain economic value  from its disclosure;  and Is  the subject of efforts that are reasonable under the  circumstances   Valuable confidential business or professional information   Relationships with specific prospective or existing customers  or clients Extraordinary or specialized training.
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