The agreement contained a non-compete clause preventing the distributor from selling certain other beers in competition with the supplier’s beer. The question of validity of this non-compete clause was left open, but the court was asked to decide the issue of severability.
In other words, would the invalidity of the non-compete clause bring about the invalidity of the whole agreement, or could the remainder of the agreement still be valid if the non-compete clause turned out to be invalid.
The court held that the non-compete clause was an integral part of the supplier’s promise to maintain the exclusivity of the agreement. As such, if the non-compete clause was invalid, this would bring about the invalidity of the entire distribution agreement.
Edward Miller, IDI country expert for the United Kingdom.