Figjam Pty Ltd v Pedrini

Figjam Pty Ltd initiated legal proceedings against Pedrini in relation to a restraint of trade clause contained in a written contract of employment. The primary issue before the court was whether there was adequate consideration for the restraint clause, given that the clause was introduced in a written contract that replaced an earlier oral agreement. The court had to determine if the transition from an oral to a written contract, in light of the requirement to have a written contract under an Award, constituted valid consideration for the new restraint term.

The court delved into the complexities of establishing consideration when a written contract is introduced to replace an oral one, which already established terms of employment. The central question was whether the mere avoidance of the "practical disbenefit" of the oral contract possibly being invalid due to the requirement for a written form could be deemed as sufficient consideration for the new restraint clause. The court scrutinised whether such avoidance constituted a tangible benefit to the employer sufficient to uphold the enforceability of the restraint clause.

In its reasoning, the court concluded that the avoidance of the potential invalidity of the oral contract could indeed be regarded as a form of consideration. The necessity to comply with the Award's requirement for a written contract provided a practical benefit to the employer, which was sufficient to validate the inclusion of the restraint clause. As a result, the court found that there was adequate consideration for the clause, and it was therefore enforceable.

The court ordered that the restraint of trade clause was valid and enforceable, thereby allowing Figjam Pty Ltd to pursue the terms of the clause against Pedrini. This decision underscored the importance of compliance with statutory requirements and the potential implications of such compliance on the enforceability of contractual terms.