Legal Question in Business Law in Michigan

A contract for a U.S. based company to market services for another U.S. based company, in the U.S., was drafted in Canada by a Canadian-licensed attorney and included a non-compete. The company to provide the marketing was owned by a Canadian. The contract was executed in Canada. No marketing services were ever performed under the contract, and three years later the U.S. company owned by the Canadian is seeking to enforce the contract and non-compete, claiming damages for violation of the non-compete. We are wondering if the contract can be challenged on the basis of the contract being drafted in Canada, by a non-U.S. licensed attorney, for business to be performed in the U.S. by U.S. companies.


Asked on 4/20/11, 10:14 am

1 Answer from Attorneys
Kevin B. Murphy Franchise Foundations, APC

As a Franchise Attorney I can say the answer is no. It's the same as companies that draft their own non-competes and someone challenging it down the road with "hey, but an attorney didn't draft this." Noncompetes must be challenged on traditional grounds and it seems you will be in much better shape that way. A noncompete must be reasonable in time, geographic territory and scope of prohibited conduct. Trying to enforce a noncompete that's over 3 years is really stretching; a year or less is probably max. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation

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Answered on 4/20/11, 4:17 pm


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