All,
I have a Contract law hypothetical:
A subcontract indicates the subcontractor covenants and agrees that "for a period of 6 months after the term of the subcontract, the subcontractor will not, either directly or indirectly, enter into a contract with End Client X for services Y and Z".
The question: Could a company bound by this clause enter into a subcontract with a Prime that is performing services Y and Z for Agency X? In a Prime-Sub relationship, the sub has no privity of contract with the end-customer...the subcontract relationship is entirely between the Prime and the Sub. There is no contractual relationship between the Sub and the end-customer.
To me, the restrictive language reads that one only violates the clause if the result is a contract with Agency X (whether that contract be direct, or somehow "indirect") for services Y and Z.
My thought is that a Sub does not violate the clause because it is not entering into *any* contract with Agency X: there is no contractual relationship of any kind between Sub and Agency X.
For the sake of discussion, I request that any other legalities surrounding enforceability of non-compete clauses in general be put aside - I'm really just bothered by the "indirect contract" language. I understand the intent was likely to precisely address a subcontract scenario, but based on the limited research I've done I can't seem to find any acknowledgement that an "indirect contract" is a legally recognized concept.
Thanks in advance,
-MuchToLearn