VocabuLaw

Covenant

What is it and what does it mean?

Description of the legal term Covenant:

A covenant is a formal agreement or promise, often found in legal documents, whereby one party agrees to do or not to do something. Covenants are commonly used in property law, employment contracts and other legal agreements. They can be legally binding and enforceable in court if they meet certain legal requirements.

In property law, covenants are often attached to land or property and can impose restrictions or obligations on the use of that land or property. These are known as restrictive covenants or positive covenants.

Legal context in which the term Covenant may be used:

Restrictive Covenant in Land
A homeowner, Mr Smith, buys a house in a development with a restrictive covenant that prohibits owners from building additional structures on their property that exceed a certain height. This covenant is designed to preserve the character and appearance of the neighbourhood. If Mr Smith decides to build a large extension to his house in breach of the covenant, the other residents or the developer could take legal action to enforce the covenant and require Mr Smith to alter or remove the extension.

Employment covenant
In an employment context, an employee, Jane, signs a contract with a non-compete clause when she joins a company. The covenant restricts her from working for competing businesses or setting up a similar business within a specified geographical area and for a specified period after she leaves the company. If Jane leaves the company and starts working for a competitor in breach of this covenant, her former employer could take legal action against her for breach of the covenant.

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