Our freelancer contract loophole cost us $4,000 when we couldn't enforce a non-compete clause

I always thought our boilerplate contracts were fine until a former contractor took three of our clients last quarter and our legal team said the wording was too vague to pursue, so now I'm rewriting every single agreement we've got - what horror stories have taught you to actually read the fine print?

3 comments

3 Comments

patriciareed15d ago

One specific example I've seen is a company in my city that lost a major account because their non-compete was so strict the court ruled it was basically unenforceable restraint of trade. I mean, if you lock someone down so hard they can't work in their field at all, judges tend to side with the freelancer, not you. Maybe it's just me but sometimes being too aggressive with those clauses can backfire worse than having no clause at all.

margaret_williams515d ago

Don't you just hate it when companies shoot themselves in the foot like that? I've seen it happen a couple of times around here too, where a local firm spent thousands on legal fees to enforce a non-compete that was so over the top the judge basically laughed them out of court. The worst part is they end up with a reputation for being bullies (which scares off good talent) and still lose the client anyway. It's like they forget that restraint of trade laws exist for a reason, you know?

miles7215d ago

Lost a major account" is brutal, @patriciareed, that's the kind of thing that sticks with you. I've seen it happen too where firms get so locked into their own rules they forget the judge has a brain. A reasonable non-compete works way better than one that gets tossed out and costs you business.