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I'm a 3D generalist who was contacted to provide models and artwork for an "AI integrated game" over the course of two months. I'm not looking for legal advice — mostly just a sanity check of sorts, I guess.

The NDA states:

  1. NON-COMPETITION The Receiving Party shall not, directly or indirectly, engage in any activities, businesses, or projects that compete with the Disclosing Party, or attempt to contact or engage with the clients of the Disclosing party for a period of one year following the termination of this NDA.
  1. TERM AND TERMINATION

4.1 Term. This NDA shall commence on the Effective Date and shall continue until 23/10/24, unless earlier terminated by the Parties. 4.2 Termination. Either Party may terminate this NDA upon written notice if the other Party breaches any material provision of this NDA.

  1. GOVERNING LAW This NDA shall be governed by and construed in accordance with the laws of the state of Victoria, Australia.

I live in the US. After browsing the internet, this wording seems unusually vague and restrictive considering that it effectively lasts 2 years for what is only a 2 month contract. I looked into Australian law and it seems that this is likely unenforceable, but I haven't talked to a lawyer there (nor do I have the money to pay for one at present) and I'm obviously not one myself.

I'm sure questions like this are common here, so thanks for your patience. Thanks in advance for any help!

Edit: I've just heard back from them and they agreed to update the end of term to the end of employment (effectively shortening the non-compete from 2 years to 1 year and 2 months).

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    @TymoteuszPaul, that company is located in Victoria, Australia. Oct 23, 2023 at 19:02
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    You are putting at risk 1.2 years of your life, possible if unlikely lawsuit, possible lots of lost income, over not getting around a 100$ legal opinion (and that's what you need, sanity check if you have doubt about the terms)? Find the money, get the contract reviewed, this really is 101 of contracting.
    – Aida Paul
    Oct 23, 2023 at 20:05
  • It clearly says for a period of one year, not two years.
    – Brandin
    Oct 24, 2023 at 13:10
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    For a 2 month contract I'd still consider 1.2 years as too long. And the big question you haven't mentioned - what compensation are they providing you for signing this non-compete? Because if they have already paid you for your work, you still have to ask "What's in it for me?"
    – Peter M
    Oct 24, 2023 at 14:17
  • @CrazyFrog I have experience with lawyers and I definitely do not know such a thing. Simple matter require simple answers, explaining better what is your exact position, and what can happen if it goes wrong. Honestly to have explained why it's a very bad idea to sign such a thing unless you are desperate. The possible downside is almost never worth the hassle.
    – Aida Paul
    Oct 24, 2023 at 14:53

3 Answers 3

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Kiwi here - although not in Aus, there are a lot of Cultural and legal similarities.

I am also not a lawyer and this quesiton is likely to be closed due to the no legal advise bit of the Workplace SE.

However, as some general advice - in NZ and Aus there are a number of factors at play:

1: How senior you are.

The higher up in the organization you are or the more access to commercially sensitive information you have, the more likely they are to seek to enforce it. As someone who just provides art-work, that would IMO almost never meet the threshold.

2: Proximity.

This is both physical/geographic proximity and metaphorical proximity. The first factor would weigh heavily in your favor. The second is a lot broader. Case in point - I work in IT I've had non-compete clauses in all my contracts and I've yet to have an issue. First job - working for a hosted services provider that targeted medium sized business, second job working for a web hosting provider that targeted both consumers and also enterprise size customers, 3rd job working for a cloud partner.

All three are/were similar in nature, but because each one is different enough from the other that there isn't direct competition.

The typical scenario would be say you were employed by Bobs bricklaying in Bobtown. You leave and you setup Daves bricklaying in Bobtown - that would likely be enforceable.

But if you setup Daves bricklaying in Davetown that is 50 km away and outside the typical catchment area of Bobs bricklaying - a lot less likely to be enforceable.

The other scenario would be instead of starting Daves bricklaying in Bobtown, you start Daves brick supplies in Bobtowm - although in the same industry, you aren't directly competing with Bobs bricklaying - a lot less likely to be enforceable.

Since you are in the US and it's highly unlikely that the next project you will be working on in direct competition with the client in Aus - you are probably safe.

There are other factors as well - but those two alone are more than likely that in the extremely rare event that it was attempted to be enforced - it would be laughed out of the court house.

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  • Thanks so much for taking the time to answer so thoroughly! I knew I wouldn't be receiving legal advice here — just looking for a sanity check since I've never dealt with this before. I feel much better already! Also, I've just heard back from them and they agreed to update the end of term to the end of employment (effectively shortening the non-compete from 2 years to 1 year and 2 months). Oct 23, 2023 at 19:33
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    It's good explanation of how unlikely it is for there ot be any successful litigation, but it seems to miss the problem that stems from even unsuccessful one. The hassle of dealing with that is real, and painful, even if they are wrong.
    – Aida Paul
    Oct 24, 2023 at 14:55
  • @TymoteuszPaul Yeah, this was my main concern as well. Based on everything I'd read before making this post. The terms seemed unenforceable, but I know that won't stop anyone from filing a lawsuit. I'd love to visit Australia one day, but for other reasons :P Oct 25, 2023 at 17:31
  • @TymoteuszPaul - you have to consider things from the perspective of a Company in Aus trying to enforce a non-compete in the US: It will be as much of a hassle, perhaps even more so, for them. Which means it would have to be really major for them to bother. Oct 25, 2023 at 19:26
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It reads to me like they are asking you to not create your own competing game and try to sell it to their customers. Since you simply are providing artwork, that sounds like something that you would never do anyway.

I have seen similar statements in many of the NDA's I've signed. I compare the business my customers are in to the business I am in. Since we are in different businesses, I see no problem signing such statements.

The next consideration is what type of customers are you going out to find next? Unless you directly go out to find makers of AI integrated games, I doubt that you will have any indirect competition. You may want to increase your rate to cover any loss of business that you might have for signing this.

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  • Thanks! These are all factors that led me to signing the contract (after they lowered the effective length of time for the non-compete). I know they can still sue me, even if the terms would be unenforceable, but it seemed extremely unlikely, considering my role in the project, the fact that the company is based on the other side of the globe, and...basically what you said. And, worse case scenario, I get a very expensive vacation to Australia! 😅 Oct 25, 2023 at 17:36
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I am not a lawyer, but IMHO, these terms look too broad and vague to be enforceable.

But, given that most of the law in the world is precedential, I would suggest to consult a lawyer, specifically toward enforceability of such a broad clause in the context of the work you will be doing.

i.e. - 2 months of work against a year of non-work

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  • Did you submit your answer before you finished writing? Your last line is a sentence fragment – I'm not sure what you're trying to say there.
    – V2Blast
    Oct 31, 2023 at 17:18
  • @V2Blast Actually it was a descriptive comparison example, i updated the comment to specify it, thank you for your attention
    – Strader
    Oct 31, 2023 at 19:49
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    Ah, okay. I didn't realize it was intended as a continuation of the previous paragraph.
    – V2Blast
    Oct 31, 2023 at 20:15

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