My question involves business law in the state of: California
I appreciate any thoughts or insights on this. Thank you ahead of time!
My question is includes four entities. I will break it down as: End User ("User"), Prime Contract holder ("Prime"), Subcontractor ("Sub"), and Subcontractor to the Subcontractor ("S2S"). These are all business entities. No Independent contractors.
The brief story is that the User brought an S2S in and asked for assistance before the contracts were set up and any work began. They suggested that the S2S go through the Prime's existing contract to start the work quicker. The Prime asked that the S2S go through their Sub. The S2S did. The Sub made the S2S sign an agreement with a non-compete clause in it and refers to a "client" in the contract language with no clear definition of "client." There is no reference to any additional levels of business or in the capacity of an S2S. To the S2S, the non-compete is for future business (within 1 year) with the Prime but not the User even though the work was ultimately done with the User.
My questions: Is the non-compete clause enforceable against both the Prime and the User or just the Prime? Does the fact that the User brought the S2S in first for discussions then referenced the contract path change any interpretation of good faith in acting according to the contract?
I believe this touches contract law and good faith / good intentions. I hope this is clear!
I appreciate any thoughts or insights on this. Thank you ahead of time!
My question is includes four entities. I will break it down as: End User ("User"), Prime Contract holder ("Prime"), Subcontractor ("Sub"), and Subcontractor to the Subcontractor ("S2S"). These are all business entities. No Independent contractors.
The brief story is that the User brought an S2S in and asked for assistance before the contracts were set up and any work began. They suggested that the S2S go through the Prime's existing contract to start the work quicker. The Prime asked that the S2S go through their Sub. The S2S did. The Sub made the S2S sign an agreement with a non-compete clause in it and refers to a "client" in the contract language with no clear definition of "client." There is no reference to any additional levels of business or in the capacity of an S2S. To the S2S, the non-compete is for future business (within 1 year) with the Prime but not the User even though the work was ultimately done with the User.
My questions: Is the non-compete clause enforceable against both the Prime and the User or just the Prime? Does the fact that the User brought the S2S in first for discussions then referenced the contract path change any interpretation of good faith in acting according to the contract?
I believe this touches contract law and good faith / good intentions. I hope this is clear!
Contract Law: Non Compete Clause for Subcontractor of a Subcontractor
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