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Contract Interpretation

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machiner

Junior Member
What is the name of your state (only U.S. law)?IL

A contract contains the following paragraph:

"To the extent Mr. X enters into a food related business, then Mr. X may be no more than a 50% partner, shareholder or owner. However, Mr. Y shall have no such restrictions, and shall be entitled to enter into any food related business in any capacity and within any parameters he may, in his sole discretion, choose. "

Does this mean that Mr. Y can enter a food business only if Mr X does or is Mr. Y free to enter a food business regardless of what Mr. X does?
 
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quincy

Senior Member
The "preview post" feature on this site does not seem to work properly for all people. I don't know why. When you preview your post before submitting it, the post often gets deleted.

You can use the "edit post" to add your question, or you can use the "reply to thread" to add your question. Both of those features work. :)

Please be sure to include the name of your state when posting. Thanks.
 

quincy

Senior Member
What is the name of your state (only U.S. law)?IL

A contract contains the following paragraph:

"To the extent Mr. X enters into a food related business, then Mr. X may be no more than a 50% partner, shareholder or owner. However, Mr. Y shall have no such restrictions, and shall be entitled to enter into any food related business in any capacity and within any parameters he may, in his sole discretion, choose. "

Does this mean that Mr. Y can enter a food business only if Mr X does or is Mr. Y free to enter a food business regardless of what Mr. X does?
I see you figured out how to add your text. Good. :)

It appears, from the brief portion of the contract you quoted, that Mr. X has limits placed upon him if he enters into any food-related business but Mr. Y does not - regardless of whether they are working together or not.

But, this is a very odd provision and the contract (and all facts) would have to be reviewed to determine what exactly this all means. I am unsure if this is an enforceable provision. It does not appear to be.
 

machiner

Junior Member
I see you figured out how to add your text. Good. :)

It appears, from the brief portion of the contract you quoted, that Mr. X has limits placed upon him if he enters into any food-related business but Mr. Y does not - regardless of whether they are working together or not.
To be clear, it is not envisioned that X and Y would be investing in the same company but in similar companies. The only question I have is if this paragraph says that Y cannot act unless X acts first.
 

quincy

Senior Member
To be clear, it is not envisioned that X and Y would be investing in the same company but in similar companies. The only question I have is if this paragraph says that Y cannot act unless X acts first.
The portion of the contract you quoted does not indicate that.

Again, it is very hard to analyze bits and pieces taken from a contract, especially without knowing the facts behind the formation of the contract. Contracts almost always must be reviewed in their entirety first, to understand their meaning and intent.

As I said earlier, what you quoted from the contract is very odd and likely unenforceable.

If this is a contract you are considering signing or having someone else sign, I recommend you have the contract professionally reviewed first. I can see where that particular portion of the contract "as is" could be problematic and lead in the future to a dispute between the parties.
 

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