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Restrictive covenant

Jonathan Winston Jonathan Winston
1 min read

The High Court recently held that the seller of an accountancy business had breached a restrictive covenant that prohibited him from canvassing, soliciting or endeavouring to entice away from the business any person who during the two years prior to completion been a client of the business.

Both canvassing and soliciting involved an approach to customers with a view to appropriating the customer's business or custom, and enticing away had to be interpreted similarly. There had to be an active component and a positive intention, and the approach to the customer had to involve some direct or targeted behaviour.

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