Are restraints of trade legal? Can they be enforced? The short answer is: yes. Restraints of trade form an integral part of many employment contracts. Without a restraint, the “main man” in the business, the one with access to key confidential information, could cripple your business as soon as s/he leaves and joins (or starts up) the opposition. If you’re the employer, you would want to know: What makes a restraint enforceable? How do you draft a legal restraint of trade? It is crucial that a restraint is properly worded if it is to stand up to the Courts’ scrutiny. Our law has always recognised the employer’s right to enforce restraints of trade in order to protect its “legitimate proprietary interests.” However, these interests must always be balanced with the employee’s right to work and earn a living.
One of the advantages of having a written contract in place is the alleviation of doubt, and the ability to identify who needs to do what and when. Unfortunately, having an agreement in place does not guarantee that the deal won’t come apart at the seams. But having a written agreement can certainly help you in resolving the issue amicably and to your satisfaction.
Get the paperwork right on every part of your enterprise
By Nikki Viljoen of N Viljoen Consulting CC
Being in the new world of an Entrepreneur or Business Owner can be daunting. Not knowing where to go, what to ask, when to ask and even if you do ask, having the remote possibility of someone actually knowing what you are talking about can and will make it of the most stressful times of your life. If you are not extremely careful, you could be paying ‘school fees’ for the rest of your business life, if you don’t get it right up front. So make sure that you have contracts and agreements in place. When looking for legal generic documents or help in terms of legal documents that have to be written up specifically, I always use www.agreementsonline.co.za. Simplify your life – get your contracts in place and get yourself legally safe – it will go a long way to alleviating stress.