A legitimate interest is a legal standard used by a court in a legal proceeding. The standard is used to resolve whether a party has a specific stake in the legal case that the court is hearing.

Courts usually use the legitimate interest standard to resolve whether an enforcing party has a protectable and legitimate interest that permits them to form some restriction or conduct a specific action.

What Is a Legitimate Interest in Contract Law?

In contract law, legitimate interest refers to:

  • When the court examines the enforceability of a contract, and
  • Whether a party attempting to enforce the contract has a legitimate interest that would permit them to conduct a specific action.

This standard will usually be applied if the right is advantageous to society. For instance, when employers make a covenant not to compete for agreement with an employee which states that the worker is restricted from working in the same type of work after termination, the courts will decide whether the employer has a legitimate interest in stopping the employee from finding work and whether that interest is acceptable and appropriate.

What Is a Legitimate Government Interest?

The legitimate interest standard is also used in a constitutional factor when the government makes some regulation or restriction restricting citizens’ privileges. This standard specifies whether the law created is rationally related to a legitimate government interest.

A legitimate government interest usually applies when the government attempts to pass a regulation to safeguard its citizens’ health, safety, and economy.

What Is a Legitimate Business Interest?

The court employs the legitimate interest standard in business-related issues when employers demand new workers to enter into a non-compete agreement that restricts the worker from working in a competing company after the relationship terminates.

The legitimate business interest refers to the employer’s benevolence, and the employer uses a non-compete clause to safeguard its secret information.

For an employer to be entitled to enforce this non-compete agreement, the employer must demonstrate that the agreement is designed to safeguard a legitimate business interest, such as trade secrets, the identity of the business, and other confidential details regarding the goodwill of the company.

How Can an Employer Narrowly Tailor the Protection to Focus on the Legitimate Interest?

The employer must make a covenant not to compete that addresses only the legitimate interests and no others. The employer has to establish that the agreement is designed to protect a legitimate business interest, such as trade secrets, business uniqueness, and other secret information regarding the business’s goodwill.

Generally, non-compete agreements must be fair in duration and scope.

What Is Contract Drafting?

To completely understand the idea of contract drafting, comprehending what a contract is first may be valuable. A contract is typically described as a legally binding agreement between parties recognizing the arrangement’s rights and duties. Contracts can be formed through writing or created by oral agreement. For contract drafting, this only refers to written agreements.

Contract drafting is the action of writing down the terms and conditions of an agreement. The parties to a contract may go through several drafts and negotiation sessions before the official contract is completed. Contract drafting seeks to form a legally binding document in writing that is precise, succinct, and as close to the parties’ intentions as possible.

The drafting process can be very useful for contractual agreements. One advantage of the process is that it permits the parties to examine the terms of the contract before it becomes binding. This can help stop legal controversies over the contract from occurring in the future. If a legal dispute occurs, it can also prove the parties’ original intentions and obligations.

Ultimately, contract drafting can ensure that the parties comprehend their respective responsibilities and guidance if any problems occur while satisfying the contract. This is particularly true in situations where the contract involves complex circumstances.

How Are Contracts Drafted?

Although any person may draft contracts, it is often suggested that a lawyer draft and inspect the definitive terms to ensure that the contract is legally proper and binding. The parties to a contract will usually be the ones to determine how a contract will be drafted, but it can also hinge on the type of contract being created.

For example, employment contracts contain certain provisions and detailed terms that vary from the language found in confidentiality agreements.

Generally speaking, however, most contracts observe a plain format and include standard components, such as essential phrases that need to be defined, legalese that denotes the start or signals the end of a contract (e.g., a signature block), the privileges and responsibilities of the parties, how the parties can end the contract, general provisions, and some incorporate special clauses (e.g., insurance policies).

In addition, regardless of the kind of contract, all contracts must contain the following elements:

  • An offer;
  • The acceptance of that offer;
  • Consideration (usually cash);
  • The contract must identify its parties, and those parties must have the legal capacity to agree;
  • The subject matter of the contract must be lawful (e.g., cannot create a contract to hire an assassin);
  • There must be a mutual agreement between the parties; and
  • The parties must have mutual knowledge of their privileges and obligations under the contract.

Many contracts also contain specific terms and conditions.

Some standard contract drafting terms and conditions include:

  • Force majeure;
  • Arbitration clause;
  • Indemnification;
  • Assignment;
  • Confidentiality;
  • Warranties;
  • Choice of law and forum selection;
  • Time is of the essence clause;
  • Severability; and
  • Liquidated damages clause.

The above terms and conditions all pertain to circumstances that trigger conditional significances, duties that the parties are lawfully bound to perform, and duties that the parties must abstain from or risk breaching the contract.

What Is Contract Review?

Legal contract review refers to when a party to a contract employs an attorney to check the terms and conditions of their contract. It is strongly suggested that an attorney performs this review before a party signs the contract. An attorney should also be conferred to check a contract when there is a legal argument concerning the contract. An attorney will know what to look for and already comprehends the process of exactly how to review a contract.

Having an attorney check the contract can protect a party against future or current legal disputes in both scenarios. This is because the contract is generally the most crucial evidence in a legal matter. It is usually the first document consulted, regardless of whether the issue is resolved before a court or settled outside of a courtroom.

During a contract review, an attorney will look for specific items, such as whether the contract is clearly written and delivers clear terms, contains explicit language, or defines technical jargon, and whether it complies with the law. An attorney can also ensure that a party comprehends their responsibilities and duties under the contract and can modify or amend provisions that the party did not plan to include in the agreement.

Do I Need an Attorney?

Before signing anything that may restrict your future employment access, it is smart to have an attorney review the document. An employment lawyer can also help draft a covenant not to compete or negotiate the terms of the agreement.

Generally, a business lawyer may provide you with information to determine whether the employer has a legitimate interest in preventing the employee from working in a competing business.