Restrictive covenant

Restrictive covenant – this legal term is formed from the words “restrictive”, meaning “prohibiting”, and “covenant” (contract). This term has two different meanings, depending on where in the practice it has got an application:

1) In the sphere of Probate Law, it usually refers to a prohibition, called “restrictive covenant”. It participates in a will, where the testator gives the Title but forbids the property to be used for specific purposes that are not connected with its natural origin. For example, the testator gives a house with their will to their grandchildren but forbids them to use this house as a hostel. There cannot be a general restrictive covenant because it would make holding the possession worthless.

2) Within the Labor Law, it details a clause in the employment agreement or a declaration by the employee. It prohibits hem from working the same job, once they  end their labor contract. The role of such restrictive covenant is to give securities to the employer that no competitive business might be started by the worker once they quit the job. For example, if you work in change-bureau, there may be a restricting clause in your labor contract. For example, not to work on similar position up to two years once you quit the job.

See also “Personal will”

See also “differences between wills in various countries”

Restrictive / Legal Glossary

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