The Latest On Restrictive Covenants In Partnership Agreements

Originally published at www.irvinschein.com.

The recent decision of the Court of Appeal in Greenaway vs Sovran brings forward an interesting point about the enforceability of a restrictive covenant in a partnership agreement involving only two partners.

In this case, the parties were partners with each other in an accounting practice that operated for over 20 years. They carried on practice in two separate locations, each partner working out of a different city in Ontario. There were no other partners.  The partnership agreement was poorly drafted, having been prepared without legal advice by one of the parties based on a precedent that he had obtained at a conference in the United States (I pause to note that in my experience, this type of thing happens with alarming frequency – even among professionals).