QUESTION

What is my liability if I continue to do business with and individual that has signed a non compete contract with another company

Asked on Apr 24th, 2014 on Commercial Litigation - Ohio
More details to this question:
A individual who was an independent dealer signed a contract with a non compete clause. That stated that they will not sell products that compete with their's for 1 year after the individual has terminated with the former company
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1 ANSWER

Appellate Practice Attorney serving New York, NY
Is the individual working for you or are you just a customer or his/hers?  If the former, you may be committing tortious interference with contract, and be liable to your competitor for all damages it suffers due to the breach and/or to disgorge all profits you have made from the sales the individual has made in breach of his agreement.  While non-compete agreements are looked at with some distrust, and are often unenforceable in whole or part, they are sometimes enforced, and you can have serious problems if you breach them or employ someone knowing that that person would breach his/her non-compete agreement by working for you.  If you are just a customer, then you might theoretically still be liable, but probably only for the first company's lost profits on sales the restricted individual made to you.  You would have a claim over against the party who breached the non-compete for some or all of the monies you have to pay the first company, assuming that party has the ability to pay.
Answered on Apr 25th, 2014 at 12:34 PM

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