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  1. #1
    Join Date
    Oct 2017

    Default Does a Non-Compete, Non-Dealing Term Apply to Former Clients

    I have been contracting for someone whose business is registered and operated in the state of NY. I, myself, am based in another country.

    The nature of the work means that the contractor's clients are often short-termed. Some clients are ongoing and do remain clients for long lengths of time, but with the option to cancel their agreement with a period of notice.

    I have a non-compete clause in my contract, which understandably states:
    "Should the service performed give the Second Party access to First Party’s clients, Second Party agrees not to solicit, either directly or indirectly, any services or recommendations from any of First Party’s clients. Once the relationship between first and second party terminates, Second Party shall be prohibited from soliciting and/or accepting business for a period of not less than two years from any of the First Party’s clients without express written permission from First Party."

    It is not uncommon for former clients of the contractor to email me months later requesting assistance. Up until now, because I have been working for the contractor, I have informed the former clients that I am unable to work with them privately, and that they must go through the contractor.

    I have terminated my contract with the contractor, and I have no problems with the clause. However, I want to be able to clarify if the above clause would typically refer only to existing/ongoing clients of the contractor, or would it also extend to former clients of the contractor that no longer have a business agreement. I don't want to get myself into a bad situation by giving the wrong information to a former client of the contractor, if they happen to reach out to me about my own services. I'm also not terminating the contract on bad terms; I simply have too much other work on to continue subcontracting for this contractor. To be honest, I wouldn't work with most of their former clients personally anyway, but there are one or two that I would be happy to take on if it is above board.

    The other issue with the contract, which I only just noticed, is that although the contractor is based in NY state, and their business is also registered there (and has been since just prior to me signing the contract - I checked), the end of the contract states "This Contract shall be binding upon the Parties, their successors, heirs and assigns and shall be enforced under the laws of the Illinois." I'm confused as to how the contract could be enforced under the laws of Illinois if the business is registered in, and operated from, NY state?

    Thanks for any words of wisdom .

  2. #2
    Join Date
    Jun 2006

    Default Re: Does a Non-Compete, Non-Dealing Term Apply to Former Cliients

    You really need to show the ENTIRE contract (not an isolated clause out of context) to an attorney who can interpret the clause in context and see whatever language might exist that modifies that one clause.

  3. #3
    Join Date
    Oct 2017

    Default Re: Does a Non-Compete, Non-Dealing Term Apply to Former Cliients

    Thanks for your reply. I don't think there's anything else in the contract that would modify the non-compete/nondealing clause from what I copied and pasted, as it all relates to how I do the work, what/when I get paid, contractor owning any work that is done and confidentiality. The only other thing in the non-compete clause was the financial penalty of breaching it.

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