restrictive covenant

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restrictive covenant (ristrik´tiv kuv´ənənt),

n common clause found in a contract for the sale of a dental practice. The seller contracts that he or she will not practice dentistry within a certain time and area. A junior partner may be asked to sign such a covenant to guarantee that he or she will not compete with the partnership for a period after leaving the partnership. Also used in an employment situation.
References in periodicals archive ?
The starting position in relation to any restrictive covenant is that it will be regarded as void for attempting to restrain trade unless the employer is able to demonstrate that (i) it has a legitimate proprietary interest that it is appropriate to protect and (ii) the protection sought is no more than is reasonable having regard to the interests of the parties and the public interest.
The Lands Tribunal has power in certain circumstances to modify or discharge restrictive covenants where the original purpose of the covenant has become inappropriate.
Such restrictions may include, but are not limited to, deed restrictions, restrictive covenants or conservation easements.
There are a number of ways potentially to overcome problematic restrictive covenants but it is important to seek expert legal advice as early as possible.
The restrictive covenant may only operate for a short time.
In general, a restrictive covenant that does not exceed the business service area of the employer and does not last longer than two years is likely to be reasonable in scope.
While TEI acknowledged the desirability of legislation to clarify the treatment of such amounts, it asserted that the proposed restrictive covenant provisions are overbroad.
Modern examples of a restrictive covenant could be, for example, somebody who was considering selling part of an extensive back garden for somebody else to develop.
Contrary to popular belief, restrictive covenants are indeed enforceable, although courts will scrutinize them carefully.
You should consider including restrictive covenants in the contracts.
Based on NorAm's current debt maturity schedule, these restrictive covenants could fall away as early as September 2001.
This case is contrary to the trend in many jurisdictions to modify or rule restrictive covenants as unenforceable.