Covenant Vs. Agreement?

The Gnome

I recently had to sign what was basically a confidentiality agreement but it was called a covenant instead.

Three questions:
1. What the hell is a covenant?
2. Whats the difference between a covenant and an agreement in a legal sense?
3. Will said covenant end once employment does?

Thanking you Legal Eagles kindly!

Orchard Rebel

1. A covenant is a kind of legal promise or guarantee to do something - in this case you are promising not to breach confidentiality.

2. An agreement is an understanding reached between two or more parties. An agreement could contain a number of covenants, as well as terms and warranties. These covenants could be mutual (i.e. be made by both parties) or made by one party to another. The covenant being made here would appear to form part of your contract of employment, which is an agreement.

3. This depends on the terms of the covenant, your contract of employment and also the nature of your employment. The covenant could well continue beyond your employment if your breaching of it was likely to be of significant detriment to your employer.

dermot_sheehan

A covenant is under seal while a normal contract isn't. Since it's under seal no consideration needs to be shown to enforce the agreement and the statute of limitations of breach of it is 12 years instead of 6 years.

It doesnt necessarly have a wax seal on it, it may say signed, sealed and delivered instead. If it's between you and a company it would have the corporate seal.

The Gnome

Very interesting, thanks guys.

Does it make any difference that the coventant was seperate from the contract? I had to sign before I had the interview and got the job. My employer itself is subcontracted by another company and it is with this other company that the covenant is with, not my employer.

Orchard Rebel

It sounds from what you are saying that your employer (we'll call it "the subcontractor") may have access to information whose disclosure could cause damage to the other company (we'll call it the "the principal").

As a result, the terms of the subcontract may include a requirement that the subcontractor's employees agree to enter into a separate agreement with this principal, to which the subcontractor may or may not be a party.

There are good reasons for this. It ensures that the principal has a potential cause of action against an employee for breach of confidentiality even if their employment with the subcontractor has terminated.

Gabhain's points on the requirements under seal are well made as the principal is thus ensuring it has maximum flexibility should an employee of the subcontractor breach confidentiality, whether or not they remain in employment.

As a result, the covenant would be separate agreement to your actual contract of employment, as it is likely to have been agreed with an entirely different party. However, the covenant does still form part of the overall terms and conditions under which you work and breach of the covenant may also place you in breach of your contract of employment.