A recent case highlights the importance of careful and tailored drafting of covenants.

Read literally, a covenant prohibited an ex-employee from working for companies selling the ex-employer’s own products, rather than products in competition with or similar to the ex-employer’s products. The High Court had been willing to amend the clause to cover the latter to prevent the clause being absurd, but was overruled by the Court of Appeal. A court is entitled to construe ambiguity to avoid absurd results, but here there was no ambiguity and the employer was stuck with a commercially meaningless covenant.

(Prophet plc v Huggett, CoA)