Restrictive Covenant Query

[Tom777]

Suppose you supply services to a third party company and the services are supplied through your own limited company. You are a director of your company. There is a contract between the third party company and your limited company. The contract contains clauses restricting your ability to seek and perform work for companies with which you have worked with the third party company. However, the contract is made between the third party company and your own limited company. There is no specific mention of individuals. In that case, does the restrictive covenant apply to you as an individual, for example, if you were working as a sole trader or as a director of a different company?
Thanks.

[Paralytic]

In that case, does the restrictive covenant apply to you as an individual, for example, if you were working as a sole trader or as a director of a different company?
Thanks.

On the face of it no. But, I suspect you've built a scenario here that leads us to giving you the answer your want to hear.

If you share all the facts (ie. specific clause wording), you're likely to get a more complete answer. eg, it doesn't have to mention a name, but could state, eg, representatives of the ltd company.

And, have you, sorry, this person who definitely isn't you, seen the contract between the 3rd party and the client?

[northernladuk]

It all hinges on whether or not someone will lose out on money because of your actions.

Hard to elaborate as I also expect you have a scenario in mind and are looking for one specific answer to suit your needs but in general.

If you go direct with a client personally that stops the preferred agent placing a person they'll likely come after you as they are losing revenue. The legalities aren't really your problem. It's more that the agent causes a stick and any other parties in the chain don't want to get embroiled so will fall in to line and not touch you.
If you are with a consultancy and want to by pass them to go direct then the consultancy will be out of pocket and it will stand... and so on. If there is no chance anyone making any money out of it there is no reason to enforce the clause.

If you have a handcuff as a business it will usually cover anyone at the company. After all, the company can't do the work, people do.

If it's going to get complex you need a clearer example as it's all down to the details of the situation.

[Tom777]

On the face of it no. But, I suspect you've built a scenario here that leads us to giving you the answer your want to hear.

If you share all the facts (ie. specific clause wording), you're likely to get a more complete answer. eg, it doesn't have to mention a name, but could state, eg, representatives of the ltd company.

And, have you, sorry, this person who definitely isn't you, seen the contract between the 3rd party and the client?

Company A enters into an agreement with Company B. Simon is a director and an employee of Company A. Simon, working for Company A delivers consultancy work on behalf of Company B on an associate basis. Agreement between Company A and Company B is specified as an agreement between Company A and Company B. There is no mention of Simon by name directly or indirectly in the agreement. A section of the contract states that Company A is entitled to seek and deliver work to other companies, subject to the following:
Company A is NOT entitled to seek, apply for and accept contracts to supply goods or to supply services either directly or through subcontracts during the currency of this Agreement, or for a period of 12 months following the termination of this Agreement, to the following:
- Any client of Company B with whom Company A has been involved in delivering services on behalf of Company B.

There was no attempt intended to ask a leading question, hopefully the above clarifies matters.

[WTFH]

Company A enters into an agreement with Company B. Simon is a director and an employee of Company A. Simon, working for Company A delivers consultancy work on behalf of Company B on an associate basis. Agreement between Company A and Company B is specified as an agreement between Company A and Company B. There is no mention of Simon by name directly or indirectly in the agreement. A section of the contract states that Company A is entitled to seek and deliver work to other companies, subject to the following:Company A is NOT entitled to seek, apply for and accept contracts to supply goods or to supply services either directly or through subcontracts during the currency of this Agreement, or for a period of 12 months following the termination of this Agreement, to the following:
- Any client of Company B with whom Company A has been involved in delivering services on behalf of Company B.

There was no attempt intended to ask a leading question, hopefully the above clarifies matters.

Who signed the contract on behalf of your company?

If you set up a new company (or whatever your undisclosed plan is), whose signature would be on the paperwork?

How long have you been contracting?

[Tom777]

Who signed the contract on behalf of your company?

If you set up a new company (or whatever your undisclosed plan is), whose signature would be on the paperwork?

How long have you been contracting?

The contract was signed by me/Simon (in the above example). Any future company's paperwork would be signed by me too. Working on an associate basis for more than 10 years.