Rita is employed as a financial investment advisor for a local investment services firm and signed a restrictive covenant that prevents her from working as an investment advisor for a period of 5 years anywhere in Canada should she leave her current employer.On what legal basis might this clause be unenforceable?
A) It violates the Charter guarantee of freedom of mobility.
B) It constitutes an unreasonable restraint on trade.
C) Rita failed to read the contract before signing it.
D) It violates the Criminal Code.

Question

Quizplus · Accepted Answer

Restrictive covenants, like the one Rita signed, can be deemed unenforceable if they are considered to constitute an unreasonable restraint on trade. This means if the restriction is too broad in terms of duration, geographical scope, or the nature of the restriction, a court may find it to be excessive and not enforceable. In Rita's case, being prevented from working in her profession anywhere in Canada for 5 years could be seen as unreasonable.

Rita Is Employed as a Financial Investment Advisor for a Local