Question

Professional Basketball teams have been pursuing Cody, a recently graduated high school athlete, for nearly two years. Cody and his father hired an experienced agent to represent him in contract negotiations with the various teams. Unfortunately, just before meeting with the agent to review contracts, Cody's father was hospitalized in critical condition following a car accident. Despite knowing that Cody would be alone, the agent insisted that they meet and Cody decide on a team to work with. The agent convinces Cody to sign a lucrative contract with a top-rated team, but the agreement contains a non-competition clause that would keep Cody bound to that team for his entire career. The contract has a 10-day grace period for review and cancellation with no penalty. After Cody's dad recovers and returns home from the hospital two weeks later, they discuss the contract and seek to cancel it. Is it likely that Cody will be able to avoid the contract? a. No, because Cody signed the contract, and it was a good deal. b. No, because Cody did not cancel within the 10-day grace period. c. Yes, because the non-competition clause is oppressive. d. Yes, because Cody's dad was not present at the signing.

Answer 1

Answer:

C) Yes, because the non-competition clause is oppressive.

Explanation:

Non competition clauses are included in contracts between en employee and his/her employer. It generally requires that the employee agrees to not work with a competing firm during a reasonable amount of time after he/she leaves the company. Generally this clause requires a certain compensation for the employee and they must also be reasonable in both time and deciding who can be considered a competitor.

In this case, the contract signed by Cody practically ties him to a team for the rest of his life and that is not reasonable at all. Most states do not recognize non competition clauses that last more than 2 years, since that is considered a very long duration.