December 2, 2021

What Is A Restrictive Covenant Agreement

A restrictive agreement is an agreement that prevents a company or other party from performing certain actions. For example, a restrictive agreement with a public company could limit the amount of dividends the company can pay to its shareholders. It could also set a ceiling on executive salaries. A negative agreement can be found in employment contracts and merger and acquisition (M&A) agreements. However, these restrictive covenants are almost always found in credit or bond documents. A restrictive agreement (sometimes called a deed restriction) in real estate is an article that contains restrictions on the use of the property. Restrictive agreements are common in condominiums and other restricted access situations where all properties are similar – the Condominium Corporation or the Owners` Association wants to keep property values high. As such, Mr Pollock`s undertakings were effectively enforceable, at least in part. This meant that Mr.

Pollock had pierced them while working for Dodd. Some examples of racially restrictive alliances persist in some states, although they are generally no longer enforced. There may be cases where real estate still lists racially restrictive alliances to prevent minorities from buying the properties and integrating into the community. Such policies are no longer legal and should be challenged in court if necessary. Architectural guidelines set out in restrictive agreements may limit plans to renovate the property. The buyer of the property may be asked to preserve its original appearance or to keep the property in a certain color palette or style comparable to neighboring properties. Although restrictive agreements are most often found in employment contracts, they can be included in several other types of agreements. Examples include share grant agreements, termination agreements or shareholder agreements. The latter is remarkable. Shareholders are usually key employees who are familiar with the company`s confidential information and business plans. Non-compete obligations in shareholder agreements protect all shareholders by preventing the owners of the company from using inside information to create or join a competing company for an unfair advantage […].

About Bob Bergey

Bob has been driving motorcoaches since 2002, in every state east of the Mississippi and a few west, as well as the four southeastern-most provinces of Canada. In addition to driving, he's an avid photographer (and former professional), enjoys writing and technology.