Ehrman v Bartholomew (1898) 1 Ch 671

In this case the defendant entered into a contract with the plaintiff, a firm of wine merchants, to work as a salesman for a period of 10 years. In clause 3 of the contract, the defendant agreed to inter alia, "devote the whole of his time during the usual business hours of the business of the firm and not employ himself in any other business or transact any business with or for any other persons other then the firm of the plaintiff during the continuance of the agreement."

The agreement at clause 13 also provided that after the termination of the employment by any means, the defendant should not enter into any business of the type he performed with the plaintiff.

The defendant left the plaintiff and entered into the employment of another firm. The plaintiff sought an injunction to restrain her from engaging in any form of business or service of the type he performed with the plaintiff. The plaintiff based his application under clause 3 of the agreement. The Court refused the injunction sought.

Romer J said at pp. 673-674:

"In the first place, having regard to clause 13, I doubt whether clause 3 was intended to apply to the state of things now existing when the defendant is no longer acting as a servant of the plaintiffs, and cannot be compelled so to act, though his refusal to do so is in breach of his contract to act for the ten years mentioned in the agreement. but if I assume that clause 3 was intended to apply to the existing circumstances, then the serious question arises whether the Court ought to enforce such a negative stipulation as is there contained.

That clause would in terms prevent the defendant, at any rate during the usual business hours, from engaging or employing himself in any business other than that of the plaintiffs, and from transacting any business with or for any person or person other than the plaintiffs; and this for a period of ten years from August 30, 1987, or for so much of that period as the plaintiffs choose. And it is clear that in this clause the word "business" cannot be held limited by the context to a wine merchant’s business or in any similar way. so that the Court, while unable to order the defendant to work for the plaintiffs, is asked indirectly to make him do so by otherwise compelling him to abstain wholly from business, at any rate during all usual business hours.

In my opinion such a stipulation is unreasonable and ought not to be enforced by the Court. As the present Master of the Rolls stated in Whitwood Chemical Co v Hardman cases where negative stipulations in contracts of service are enforced by the Court ought not to be extended, and are to be regarded as anomalies which it would be very dangerous to extend. To enforce such a general negative stipulation as I find here would be in my opinion a dangerous extension, for here the stipulation extend to business of any kind, while the negative stipulations enforced in the prior cases, such as Lumley v Wagner were confined to special services."

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