QST LA 245 Chapter Notes - Chapter 10: Non-Compete Clause, Inequality Of Bargaining Power, Unconscionability
23 Jul 2018
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Most restraint of free trade is barred by antitrust law, but it is the common law that still regulates one restriction on trade: agreements to refrain from competition. To be valid, an agreement not to compete must be ancillary to a legitimate bargain: ancillary means that the noncompetition agreement must be part of a larger agreement. In general, other restrictions on future employment are unenforceable. An exculpatory clause is a contract provision that attempts to release one party from liability in the event the other is injured. An exculpatory clause is generally unenforceable when: It attempts to exclude an intentional tort like battery or gross negligence (carelessness far greater than ordinary negligence: the affected activity is in the public interest, such as medical care, public transportation, or some essential service. If it"s a recreational activity, like skiing, it"s probably enforceable: the parties have greatly unequal bargaining power, unless the clause is clearly written and readily visible.
