Legal Question in Business Law in California

Re: Exclusivity Contract

No, B&P 16600 probably does not apply to your situation. You may have other remedies, but generally the remedies are monetary for breach of a contract. In limited situations you can also get an injunction to stop the breach. Also, there is a civil lawsuit available for tortious interference with business expectations. You should probably discuss your options with an attorney. Good luck.

Re: Exclusivity Contract

No.

First, contracts are rarely "automatically void." A few examples include contracts in restraint of marriage, and contracts for a single, illegal purpose. Even contracts entered into under duress, menace, fraud, undue influence or mistake are not void, but may be rescinded by a party in the manner prescribed by law. Civil Code sections 1566, 1567, 1598, and 1669. It is important to dostinguish between contracts that are truly void from the get-go and cannot be enforced by either party from those which are voidable, because unless and until the party seeking to void a voidable contract takes the appropriate steps to rescind it, the voidable contract can be enforced as written.

Next, Business and Professions Code section 16600 deals with different subject matter. Its purpose is to express the policy of the State of California that no person should be restrained by contract from engaging in any lawful business, trade or occupation. (Note that B&P 16601 and 16602 create important exceptions, but generally a covenant not to compete is void).

Finally, the existence of the conflicting contracts, one between ABC and (let's say) PQR, and the other later contract between XYZ and PQR, does not by itself establish that there has been any tortious interference. All the facts show is a likely breach of contract action by ABC against PQR when it does business with XYZ, and a likely breach of contract action by XYZ against PQR when it does business with ABC.

In order for ABC to be able to sue XYZ for tortiously interfering with its earlier contract with PQR, ABC will have to show that XYZ knew of the ABC-PQR contract and that it was exclusive, and nevertheless entered into its contract with PQR intending to interfere with the prior ABC-PQR relationship.

I believe tortious interference with contract is a creation of the courts and not covered by any California statute.