legal question from take home test?

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squall0229

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This one has been giving me trouble:

Flo worked as a traveling sound technician for Sound Inc. which operated sound equipment for musical bands. Sound Inc. provided into from it's archives to Flo so that she could efficiently set up the equipment in the way that various bands wanted. When Flo started working for the company she had to sign a contract in which she promised that if she left her Sound Inc. job she would not provide services to music bands anywhere in America for five years. Flo then quits the company. Explain whether it's likely that she can persuade a court to reduce or cancel those limitations on her future activity.
 
It probably is likely that a court of competent jurisdiction would commute that clause in her contract. It is what is known as a "covenant not to compete" or a "non-competition clause." Each state usually has guidelines that govern the reasonableness of such contract provisions. These are matters of contract law.

What this essentially does is cause Flo to have to flee the country in the event that she quits her job and wants to continue in her line of work. That's just not reasonable. It MIGHT be reasonable for the contract to provide that she doesn't provide services competitive to her current employer within a specific, reasonable radius for a certain, specific amount of time. It is also reasonable for the contract to provide that the employer would sustain incalculable damages if she were to solicit any of the company's employees to come work for her, or if she were to solicit current company clients to switch to her operation after she left. Those would all be upheld, and the penalties for those situations are usually referred to as "liquidated damages."

Most contracts also contain a Severability clause, which says that if any part of the contract is found to be unenforceable (for any reason, including illegality of a clause), the other clauses survive. A court may also, at its discretion, enforce the maximum allowable non-competition provisions tolerable in the state in lieu of what the contract says.
 
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