Legal Case Study

S6 Worksheet
Question 2
Facts
1. Ben and Jan are veterinarians at an animal hospital located in the Bukit Timah
area called Vets R Us.
2. Vets R Us provides the full range of pet healthcare services, including emergency
surgery, hospitalisation of animals and recuperative care.
3. Jan hired Ben 5 years ago when she needed help with the practice that she
started.
4. Ben’s employment contract contains the following clause:
“In the event of termination of employment, Ben undertakes not to:
1. Work as a vet or animal surgeon or enter into partnership with any other
competing veterinary clinic, surgery or hospital in Singapore for a period of twelve
(12) months, and
2. Open a veterinary clinic, surgery or hospital or any related business within a 5km
radius of Vets R Us for a period of twelve (12) months.”
5. Ben wants to leave and immediately open a veterinary clinic near Vets R Us.
Question 2.1
What kind of agreement did Ben enter into with Jan?

Contracts in restraint of trade are defined in Cheshire, Fifoot and

Furmston as “a contract in restraint of trade is one by which a party
restricts his future liberty to carry on his trade, business or profession
in such manner and with such persons as he chooses.”

In this case, the application of covenants in restraint of trade is in the

contract of employment.
Question 2.2
What is the legal effect of the above clause?

The above clause consider as a non-compete clause which restricts the

employee freedom to work in the employer’s area of business or the
employer’s competitors. On the other hand, a non-compete clause is
ineffective unless it is a reasonable protection of the employer’s
legitimate interests.
In the case of Man Financial, the appellant was a brokerage company while the
respondent was the appellant’s former managing director. The court was concerned
with the following clause:
• A non-competition clause which prevented the respondent (employee) from
participating in or rendering advice to the appellant’s competitors for 7 months.
With respect to the non-competition clause, the court found that it was
unreasonable restraint of trade as there was no legitimate proprietary interest to be
protected. The scope of the activities prohibited was also wide to be reasonable.

In case of Smile Inc, the appellant was a chain of dental clinics while the respondent
was former employee to the appellant as a dental surgeon. The court concerned
with the clause of:
• A clause which prohibited the respondent from practicing with in a 3 km radius
from any of the appellant clinics (“Radial Clause”).
The court found that the Radial Clause was void for being anti-competitive.
Question 2.3
Is there any rule or law that Jan can invoke to allow her to enforce the
clause against Ben?

Jan can only enforce a restraint of trade clause to the extent that is
reasonably to protect the business interest. However, Jan must
consider two issues to apply non-compete clause as a restraint
covenants:
a. Legitimate interest that the clause protect
b. Whether the clause reasonably protect Jan interest
a. Legitimate interest that the clause protect
A restrictive covenant will only be enforceable if it protects a legitimate
business interest, otherwise it will be regarded as an unlawful restraint of
trade. 

a.Whether the clause reasonably protect Jan interest:

i. What activity it prohibits the employee from doing
ii. How long the prohibition is
iii.What geographical area the prohibition applies to
Thank You