If the other party is not honoring an article in our contract, what is my recourse for this breach?

“Vendor agrees that for a period of 12 months following the termination of this agreement, it will not solicit or offer consulting services or become an employee or contractor to XXXXXX without the Company’s prior written approval which shall not be unreasonably withheld”. I am the vendor and have invoked a written request to the Company which has been ignored.

Asked on August 14, 2012 under Business Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You have two options:

1) Especially if you have provided written demands for the approval (and so can document your requests), you can treat their failure to respond as being a breach of the contract, which breach frees you from your reciprocal obligations--i.e. would let you become a consultant, contractor, etc. (When one party breaches a contract, the other party is often freed from its resposibilities.) If you go this route, be prepared that the company may try to take legal action to stop you from doing this; therefore, while you should have a good defense (though the outcome of litigation is never certain), you need to be prepared to have to defend yourself in court.

2) Alternately, you could affirmatively bring a legal action seeking a court order forcing the company to give you the approval. This will delay you (until the case goes to court) and require you to spend time and money, but will provide certainty.


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