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28-07-2014

No, according to the Court of Appeal in Prophet plc v Huggett.

P sold software. A restrictive covenant prevented H from selling Prophet's software after he left their employment. H joined a competitor, which sold competing software but which was not P’s software, because only P could sell P’s software, they did not supply it to anyone else to sell. Read literally, the restrictive covenant was useless as nobody else sold their software, ever.

The High Court held that the clause should be rewritten to give effect to the intention of the parties, that is to prevent H selling software which was similar to P’s software. The Court of Appeal disagreed. A purposive approach could be taken where a restrictive covenance was ambiguous but this was not ambiguous – it was just badly drafted.

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