Harsh interpretation

Our client has owned and run an equipment hire company for a number of years and agreed a sale of assets and goodwill to a competitor in October 2007. The contract agreed a price of £5 million to be paid in seven equal instalments with the first on completion (October 2007) and subsequent payments at six-monthly intervals. The sale contract also agreed a five-year service contract for the owner-director as the purchasing company realised that the business depended a great deal upon the personal service given by him. The service contract included exclusivity and non-competition clauses.

The contract was made between the buying company our client's company and our client and stipulated that the price paid was for hire stock and goodwill. During negotiations our client's role in building and maintaining a client base was at the forefront and resulted in the service contract and...