I had a call yesterday from a well-known deal-of-the-day promotion company (let’s call them company A), keen to run a discounted Sussex Jewellery School promotion for their members. I told them that I dealt with their main competitor (company B) on one occasion in the past, and seemed to remember that company B’s contract terms (draconian IMHO) prohibit me from running deals with anyone else for some years afterwards.
Company A then emailed me saying they “guarantee” that company B would take “zero action” against the Sussex Jewellery School for breach of contract if we decided to jump ship and work with company A.
I used to be a litigation solicitor and law lecturer way back when, and though my legal knowledge is mega out of date, I’m pretty sure I remember a few basic principles of commercial contract law. Whilst the prohibition in the contract with company B might be considered to be in restraint of trade (and therefore unenforceable or void), there’s no way one company (A) can guarantee whether a different company (B) will sue a third party or not. And, generally-speaking, the courts are, I think, unwilling to set aside contract terms freely agreed by commercial trading partners.
In my view, it’s pretty unethical of company A to promise me no comeback from a third party if I breach my contract with that third party. After all, an unwise small business owner could rely on company A’s promises, and could end up sued by company B. However unlikely, this isn’t impossible, and there’d be no comeback on company A for their erroneous and misleading promise. It’d be the small business owner who paid the price.
A cynic might deduce that company A would promise anything to nab themselves a lucrative deal (and I doubt company B are any better) – though I couldn’t possibly comment of course.
Fortunately for me, discounting the Sussex Jewellery School’s top-quality and carefully-priced timetabled courses doesn’t make much business sense, so I won’t be signing up.