Q.

A was employed by ABC Co. as manager in Metro Manila subject to the condition that if A will be severed from the company, voluntarily or involuntarily, he cannot get involved in any business of the same nature with ABC’s business in Metro Manila within a period of six (6) months from severance. Is the stipulation valid?

A. The stipulation is not valid because it is contrary to public policy.
B. The stipulation is not valid because it is contrary to law, as it is a restraint of trade.
C. The stipulation is valid because of the principle of mutuality of contracts.
D. The stipulation is valid because the non-involvement clause provides for time and place to prevent unfair competition and advantage.
Answer» D. The stipulation is valid because the non-involvement clause provides for time and place to prevent unfair competition and advantage.
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