Does the Shareholder Agreement exhaust “reasonable expectations of a shareholder”? In a number of oppression cases one or both parties point to the Shareholder Agreement as the source or fountain of shareholder expectations. This issue arises in a current case where Ron represents a former shareholder who was excluded from the board contrary to the assumptions, but not the terms, underlying the Shareholder Agreement at the time it was made.
Category Archives: Shareholders
Legal comment, news and articles relating to recent important developments and Canadian court decisions relating to Shareholders.
When are restrictive covenants enforceable? We have been engaged to give an opinion on the enforceability of restrictive covenants (non-competition and non-solicitation) in the context of the sale by one shareholder of a business to remaining shareholders. To be effective, these clauses have to be reasonable in terms of scope, duration and geography. Different considerations apply in the context of the sale of a business than those pertaining to an employment contract. Regardless of scope, however, to be upheld by the court, a restrictive covenant must be clear and unambiguous; if it is ambiguous it will by definition be “unreasonable” and, therefore, unenforceable.