Paul is employed as managing director of Kemas Ltd whose main object is to retail mobile phones. His contract of employment contains a clause which states that in the event of his leaving the employment of Kemas Ltd, he will not solicit their customers for a period of 2 years.

He resigns from his employment and together with his wife Ruth, forms a new company, Rozel Ltd whose main object is retailing mobile phones. Owen is a salesman employed by Rozel Ltd. He is given customer lists by Paul and immediately begins soliciting customers of Kemas Ltd. In order to raise cash for his new business, Paul enters into a contract to sell his house to Ram for RM2 million. Owen who has always admired the house, approaches Paul and makes him an offer of RM2.5 million. Paul transfers the ownership of the house to Rozel Ltd and on behalf of the company, enters into negotiation to sell the house to Owen.

QUESTION:

Advise Kemas Ltd and Ram on any action they can take.

We should advise Kemas to sue paul for breach of contract.

court case for breaching of contract will be

1. Yong Ung Kai V enting 1965