Law · Company Law
Quentin was employed by Bee Ltd as its senior design consultant. Quentin contracted with Bee Ltd that when his employment ceased, he would not compete with it or solicit its customers. After leaving, Quentin registered a company called Cee Ltd, which immediately began competing with Bee Ltd and soliciting its customers. Which of the following statements is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The non-compete agreement has no legal effect as it attempts to regulate activities after employment.
- 2Cee Ltd will be bound by the agreement because a company is always liable for the pre-existing personal contracts of its shareholders.
- 3Since Cee Ltd was formed to evade the non-compete agreement, the court will 'lift the corporate veil' and enforce the agreement against Quentin.✓
- 4Quentin is not in breach because Cee Ltd is a separate legal entity.
Correct answer
Since Cee Ltd was formed to evade the non-compete agreement, the court will 'lift the corporate veil' and enforce the agreement against Quentin.
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