What Are They and What if They are Broken? | Minnesota Non-Solicitation Contracts

November 15, 2010

Contract Breach

You’ve probably seen houses with “No Soliciting” signs in their windows or on their doors. Non-solicitation agreements are quite different.

“No Soliciting” signs on houses are requests that others not come ask the occupants for anything, including asking the occupants to purchase something. Non-solicitation agreements are generally among very different parties. A non-solicitation agreement isn’t entered into by the potential recipient of the solicitation. It is entered into by two separate parties, both of whom may otherwise engage in the act of soliciting.

In non-solicitation agreements one party to the agreement is divulging necessary information to another, generally for a business reason, but in doing so requires the other party to the agreement not to use this information to solicit others.

When are Non-Solicitation Agreements Used?

Non-solicitation agreements are used in situations where someone, maybe an employee, will learn information of another, or of a business, but the business or employer first wants to make sure that the employee cannot use the information to solicit other employees.

For example, a person may hire a worker to perform a job. In doing the work required by the job, the worker may learn information about other people who conduct business with the person who hired the worker. This information may be contact information of customers.

In order to prevent the stealing away of other customers, for example, a non-solicitation agreement may state that a person who is about to learn certain information promises not to use it to solicit others. A non-solicitation agreement may say, for example, that one person agrees not to directly or indirectly, alone or on behalf of another, provide services to, call upon, solicit, sell, divert, take away, deliver to, accept business or orders, or otherwise deal with the past, present, or prospective customers of the other party to the agreement, or assist anyone else in doing so.

When Non-Solicitation Agreements are Broken

If a person promises not to solicit others in a designated location for a designated period of time and breaks that promise, the person has breached the non-solicitation contract. A breach of a non-solicitation contract or breach of a non-solicitation provision in a contract is treated the same way as any other breach of contract.

If the non-solicitation agreement was a material, or important part of the contract (which it generally is), breach by one party entitles the other party to money damages. It also entitles the other party to cease his or her own obligations under the contract. Sometimes non-solicitation agreements will state exactly what the remedies will be in the event of a breach.

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