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Dere was an employce of Bow Co. His contract had a valid restraint of trade clause prohibiting him from setting up a competing business should he leave their employment. Derek has since left Bow Co and has formed a company Profile Co, which is now competing with Bow Co.
Can Bow Co prevent Profile Co from competing with it, and for what reason?
1.No, because the restraint clause only applied to Derek and not to Profile Co
2. No, because Profile Co was not in existence when the restraint clause was incorporated into the contract
3.Yes, because Derek is using Profile Co to evade his own legal obligations
4.Yes, because Derek and Profile Co are regarded as the same person
Is 2 the ans or 3 ,2 cuz the clause clearly stated if he establishes a business he should leave his employment so he did leave his employment and formed after that a competing business .( plz explain)The clause does NOT say that if he establishes a business, he should leave. The clause says that ‘if Derek leaves the business, he must not set up a business in competition with his previous employer’
The ‘facts’ that you’ve given me are not hugely dissimilar to the facts of the case Gilford Motor Company v Horne
In that case, Horne was found guilty of setting up a company to compete with his former employers where he was prevented by contract from personally competing with it
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