King & Wood Mallesons

Asia-Pacific 100 position: 3

Option to renew contract of services containing restraint cause validly exercised, celebrity barred from engaging with competitor

By Neil Cuthbert

The Supreme Court of New South Wales has enforced a contract of services between a television network and a celebrity talent judge to prevent the celebrity from working for a competing network during an exclusivity period agreed between the judge and the network.

Prospective employers should note that valid contracts for services, along with any options for renewal that have been exercised, will be presumed to remain on foot in the absence of terminating conduct by the parties. This may be so even in the event of subsequent variation of the terms of the contract so substantial that it may appear to have been terminated. The enforcement of contracts may include restraints or exclusivity clauses which prevent the individual from providing services to a prospective employer.

This case concerned a contract for services under which a celebrity was to provide services exclusively to a television station. Under the agreement, the television station had an option to renew the contract for a year…

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