Question
Moodz Pte Ltd (Moodz) is a Singapore-based company that designs, manufactures and sells clothing and accessories incorporating wearable technology. Its products are specifically designed to
Moodz Pte Ltd ("Moodz") is a Singapore-based company that designs, manufactures and sells clothing and accessories incorporating wearable technology. Its products are specifically designed to capture fluctuating stress levels of the wearer and recommend appropriate stress-relieving activities.
Given its success in the Singapore market, Moodz is considering an expansion of its business to Malaysia, China and the United States and has already commenced preliminary discussions with potential distributors in those countries. It is also proposing to include the following clause in its employment contract with its senior management such as the Chief Executive Officer, Head of Sales & Marketing, and Vice-President, Research & Development:
Upon leaving the Company, the Employee will not seek to damage or injure the Company's reputation or to canvass, solicit or procure any of the Company's customers for himself or any other parties.
In the event that the Employee leaves the Company (whether due to his resignation or dismissal), the Employee shall not join any another company or business that is or may be competing with the Company in the field of wearable technology in Singapore or elsewhere.
(a) Identify and state the key issue relating to the above clause. Briefly describe two (2) types of contracts in which such a clause is typically found.
(6 marks)
(b) Analyse the above clause and state your views on whether it is valid and enforceable. Support your analysis with reasons and relevant case law.
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