Court cannot rewrite an unambiguous restrictive covenant that is pointless (News, 23 July 2014)

Article summary

If the natural meaning of a restrictive covenant is unambiguous, but produces a covenant which is pointless because it is likely to have no, or little, commercial effect, a court cannot interpret the covenant differently from its clear meaning simply in order to give it commercial effect. In these circumstances, the parties have simply made a bad bargain. In considering whether something has gone wrong with the drafting of the covenant (so as to allow it to be construed to give effect to what the parties intended to achieve by it), a vital part of the context is whether it was drafted by someone who was sensitive to the need for the covenant to be drawn tightly to ensure the restriction imposed on the employee was no wider than reasonably necessary. If it was drafted by such a person, then the court is less likely to be confident that something has gone wrong with the drafting. Court...