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ARTICLE · 26 DECEMBER 2012

An Unsigned Contract Is Not Necessarily Fatal

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It is a myth that if the employee has not signed the contract then the restriction cannot be enforced.

United KingdomEmployment and HR
Louise Williamson
Louise Williamson
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If an employee does not sign his or her contract of employment, it does not necessarily mean that he or she is not bound by the terms of it or any post termination restrictions in it, as the recent case of (1) FW Farnsworth Ltd (2) Northern Foods Ltd v Paul Lacy & Ors confirms. Voluntarily accepting a benefit under a contract can be taken as acceptance of its overall terms, including any post-termination restrictions.

Mr Lacy was initially employed by FW Farnsworth Ltd ('Farnsworth') under a contract he signed in 2003 which contained no post-termination restrictions. In 2009, he was promoted to a senior management position and was given a new contract containing restrictions preventing him from working for rival businesses or soliciting customers. He looked briefly at the document then put it, unsigned, in his desk drawer. In 2012, when Mr Lacy resigned intending to join a rival company, Farnsworth applied to court for an interim injunction to enforce

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