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Alex J.
Alex J., Litigator
Category: UK Law
Satisfied Customers: 3497
Experience:  LLB, LPC, DELF
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My question involves a contract between a company in the

Customer Question

Hello. My question involves a contract between a company in the state of New York and a contractor based outside of the U.S. The terms of the contract are under New York law.
I am the director of a non-U.S. limited company. The company entered into a contract with a U.S.-based company earlier this year. My personal name isn't mentioned throughout the contract; but it is printed at the bottom of the contract, underneath where I signed on behalf of the company. The non-U.S. limited company is defined as 'you' throughout the contract.
The contract will shortly terminate. There is a restrictive covenant in the contract, prohibiting 'you' (the non-U.S. limited company) from performing any competitive work for a specified period after the contract terminates.
Am I (as an individual) also subject to this restrictive covenant? Or does the covenant only apply to the limited company and it's employees?
Thank you!
Submitted: 1 year ago.
Category: UK Law
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Is the limited company UK based? Do you personally have any assets in New York?
Are you UK based?
Kind regards
AJ
Customer: replied 1 year ago.
Thank you, AJ.I am based in the UK, and the limited company is based in the UK. I don't have any assets in New York.On a side note, I would be willing to resign as director of the non-U.S. limited company if this personally freed me to work as an individual on projects covered by the restrictive covenant.
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
I cannot tell you the effect of this under New York Law, what I can tell you is based on what you have told me this is quite clearly an obligation signed for the company and not you personally. Under English law is you left the company they would not be able to bind you personally to restrictive covenants you had not signed up to in your personal capacity.
Further more if they wanted to enforce this against you they would have to do so in England because this is where you are based. English Law would be very unlikely to interpret these restrictions as widely so as to say they applied to the company's employees, who had not signed up to the contract, as this would be against public policy. Restrictive covenants in England have to serve a commercial purpose and are very strictly interpreted by the courts, they interpret them in the loosest sense possible because they serve to restrict some one's ability to earn a living.
If you left the company I think it would be highly unlikely these would be enforced against you personally in England - however if the NY company wants to kick up a fuss that is their prerogative to do so, so be aware it may cause an argument for you.
I look forward to hearing from you.
Kind regards
AJ
Customer: replied 1 year ago.
Thank you, Alex.The contract states "the laws of the state of new york govern this agreement" and "all parties must submit to personal jurisdiction before a proper court in the state of new york".This leads me to believe they would be able to enforce the covenant in New York, rather than in England, as per your email above. Is this correct?Can you please explain why you can't tell me the effect of this under New York law?thank you,
Jodie
Expert:  Alex J. replied 1 year ago.
Hi,
Thank you.
It is all very well them enforcing it under New York Law, but if you do not have any assets there, you do not intend to take up employment there, they would still need to enforce any Judgment in the UK in order for it to have any practical effect on you. Therefore the laws of New York in relation to your personally are not necessarily relevant.
I would need to refer the question to the New York Lawyers section.
I will do so now.
Kind regards
AJ
Customer: replied 1 year ago.
Thank you, Alex.I hope you understand why I need as many details as possible. I am just an individual trying to support my family, and need to make sure that if I go ahead I won't be sued.I appreciate your input and look forward to hearing feedback from your New York law section.
Customer: replied 1 year ago.
Hello Alex,I am sending you some more information, which may be useful...I have taken a look at the invoices, and they are all in the name of the limited company. However, the registered address for the limited company is also my home address; and my personal name and telephone number is ***** on the invoice under the 'contact information' section. Does this affect anything?
Customer: replied 1 year ago.
The restrictive covenant also prohibits doing work "in the same or substantially the same geographical area". Most of the business activity has happened in New York, and some in Chicago. Can you please let me know whether an event on the West coast of the United States (e.g. California) would contravene the covenant?
Customer: replied 1 year ago.
Hello, can you please let me know updated feedback on this query? Thank you.
Customer: replied 1 year ago.
Regarding the email chain above, I have not received further feedback and still don't have clarification on this point. I originally marked this as 'urgent', and therefore JustAnswer's response hasn't met with my expectations.

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