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BartEsq
BartEsq, Researcher
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My son signed a "Freelance Contractor Agreement" that his friend

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My son signed a "Freelance Contractor Agreement" that his friend drew up. My question is, is this contract voidable?

My first concern is that the contract states, "For valuable consideration, the Contractor, Ken Wilcox, agrees to the following:" There was no "valuable consideration" given for signing or agreeing to anything.

Basically it is a non-competition contract. It states that "The Contractor [my son] agrees not to compete, by either direct or indirect means, with the business of Tyjens Media [his friend's company] for a period of 15 years from the date of this Agreement. This Agreement will extend across the world in any possible location. The Contractor agrees that the phrase 'not to compete' means that he will not engage in any activity or business which is in any way similar to that of Ty Jensen's." The business produced lyric videos, music videos with hopes of producing movies, commercials and anything else a motion picture production company can produce.

My son was not considered an employee, but as an independent contractor. The contract states that Ken would only get paid for his services if and when they got paid for a production and after all business expenses were paid. Ken worked for TyJens for over a year 100% of his time trying to help his friend build a business. It was not productive. Ken was paid less than $2,000 for the entire year. The work he did produced in excess of $10,000 but it all went to TyJen's expenses.

They have parted ways. Is this contract voidable? If not, based on the above clauses, is Ken restricted from working for any other company which may be in competition? If a contact Ken made while he was working with TyJen's approaches Ken about making a video, is Ken restricted from working with him?

BartEsq :

Welcome! Thank you for using JustAnswer.

BartEsq :

My name isXXXXX going to try and help.

Customer:

great

BartEsq :

Your instincts are spot on. I cant think of any court that would enforce that agreement.

BartEsq :

Agreements may be deemed unenforceable if a court finds that they are unreasonable in terms of duration, geographic scope and the location and nature of the employer's clientele.


Examples of non-compete agreements that Utah courts have found to be reasonable include:



  • A 2-year restriction against the former consultant of a multi-level marketing business selling food, cosmetics and essential oils.

  • A restriction with no geographic limitation where the business and clientele of the employer were nationwide.

  • A 5-year restriction against a former pharmacist/store manager from competing within two miles of the former employer.

Customer:

What about the "valuable consideration"?

BartEsq :

With any contractual arrangement, both parties must be giving and receiving something of value, also known as consideration. Utah courts have determined that the offer of initial or continued employment is sufficient consideration or benefit to the employee in exchange for agreeing to not compete with the employer should the employment relationship terminate.

BartEsq :

But even without the considertion, the contract is not enforceable.

Customer:

I'm not quite clear on that. Ken wasn't employed. He was supposed to get paid something only if and when there was a profit after they produced something. Most of the time, they would make a video and there wasn't any "profit" because of the expenses of the company, ie rent, utilities, etc.

BartEsq :

Even as an independant contractor, the noncompete is flat out not enforceable.

Customer:

So you are saying it isn't enforceable because the time and location are too extreme?

BartEsq :

Correct.

BartEsq :

Way too extreme.

BartEsq :

Time and geographic scope are the most imprtant factors.

BartEsq :

important*

Customer:

So I am okay working with a band that I worked with while I was working with TyJen's?

BartEsq :

Absolutely, the other party can complaim all they want but fact is, it is an unenforceable contract.

BartEsq :

Clearly not enforceable.

BartEsq :

Like the contract does not exist.

Customer:

Can I assume that if any part of the contract is voidable, that it is all voidable? There isn't a clause that says otherwise. (Kind of like Obamacare)

BartEsq :

Correct. In regard to noncompete and any restrictions, the contract has effect what so ever.

Customer:

you mean NO effect?

BartEsq :

yes

BartEsq :

No effect.

Customer:

This has been helpful. Thank you very much.

BartEsq :

No problem. Any other concerns you would like to address?

Customer:

How can I print off this conversation?

BartEsq :

Copy and paste. Or you can save the web address to your favorites and view i later.

BartEsq :

it*

Customer:

Thanks.

BartEsq :

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Customer:

Great.

BartEsq :

Thanks.

Customer:

One thing more. The clients that they did some lyric videos for were from other countries. Most of their contacts they got on the internet so is the geographic location still a factor?

BartEsq :

Geography has to be reasonable. A nation wide agreement would not be enforceable. A worldwide agreement certainly will not be enforceable.

Customer:

okay, I will stop worrying about it. Thanks.

BartEsq :

Basically, the party that drafted the contract drafted terms that are not enforcebale, time and geography.

BartEsq :

No problem.,

BartEsq :

.

BartEsq :

Follow up anytime.

BartEsq :

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