(888) 785-9923 Client resolved a breach demand exceeding $35,000 on a walk-away basis, paying nothing.
A United States vendor accused an international business customer of breaching a non-solicitation clause and demanded more than $35,000. We defended the client by demonstrating that no solicitation occurred, challenging the enforceability of the covenant and damages, and achieving a mutual walk-away settlement with no payment by our client.
Docket
Jurisdiction
Nevada
Client
Foreign Business Customer
Matter
Non-solicitation breach demand defense
Duration
Under 1 month, response to resolution
Status
Settled — mutual walk-away resolution
Case summary
A United States digital-services vendor demanded more than $35,000 from an international online business owner, claiming the client broke a non-solicitation clause when the vendor’s own departing manager allegedly approached them. Milan Chatterjee showed that no breach occurred and that the clause and damages were unenforceable. The matter resolved on a walk-away basis, with our client paying nothing.
On this page
01 · Situation
Our client, an international entrepreneur who runs an online media business through a company based abroad, engaged a United States digital-services vendor to manage its online presence and handle social-media posting. The arrangement ran through the vendor’s online platform on rolling short-term subscriptions, with no signed agreement and no annual commitment, and our client paid for the service in advance.
The vendor’s own account manager independently decided to resign, for reasons internal to the vendor and unrelated to our client, and said so before any talk of working together arose. Preliminary discussions followed, but nothing came of them: our client never signed an agreement with the manager, never paid or onboarded the manager, and transferred no access or responsibilities. The manager performed no work. Separately, our client cancelled the automatic renewal of the subscriptions — a right the rolling terms plainly gave the client — intending only to let the periods already paid for run to their end.
The vendor responded by stopping work mid-term. It froze the deliverables our client had prepaid and announced it would keep the money — and only afterward sent a demand accusing the client of breaching a non-solicitation clause and seeking more than $35,000, the annualized value of the subscriptions projected across a full year. It threatened arbitration and suggested it could enforce any award against the client abroad. The client came to Milan Chatterjee to answer the demand and protect their position.
02. The legal challenge
The demand had to be met on several fronts at once. On the facts, the vendor’s theory was that our client had solicited or “poached” its account manager — but the manager had already resolved to leave, and had said so, before any discussion of working together, and no hire was ever consummated. A discussion that ends in no agreement, concerning a contractor who was leaving regardless, is not solicitation.
The law compounded the vendor’s problems. Nevada enforces a restrictive covenant only so far as it is reasonable, and the clause here swept well past that line: it barred the customer, for a year and with no geographic limit, from soliciting or hiring any of the vendor’s personnel or clients the customer had merely come into contact with, whether or not they had ever served the customer. As written, it read as an overbroad restraint of trade. The damages were no stronger — the five-figure demand was simply a year of subscriptions annualized, unrecoverable on an arrangement the client could cancel for convenience and disclaimed by the vendor’s own limitation-of-liability terms. And the vendor had itself walked away from services our client had fully prepaid, before giving any notice of breach, which handed our client affirmative claims of their own. The task was to make all of this clear — and to do it before the dispute hardened into arbitration.
What was at stake
The vendor was demanding more than $35,000 and threatening arbitration, with a stated intention to enforce any award against our client overseas, where the client and their company are based. Left unanswered, a claim built on a discussion that produced no hire could have hardened into a cross-border proceeding — with the cost, delay, and disruption of defending one, and continuing uncertainty hanging over the client’s operations while it played out.
03. Our approach
How we defended the claims, shifted the leverage, and moved the case toward a resolution that let our client keep their business, in three steps.
Dismantle the breach theory on the facts
We began where the claim was weakest: the facts. The vendor’s own account manager had independently decided to resign and had told our client as much before any conversation about working together took place — so there was no one for our client to lure away. And whatever preliminary discussions followed were never consummated in a hire. No agreement was signed, no payment changed hands, no onboarding occurred, and no access or responsibilities were transferred; the manager did not perform a single day’s work. We laid the sequence out plainly, because a solicitation claim built on a contractor who was leaving regardless, and a discussion that produced nothing, has almost nothing to stand on.
Show the covenant and damages fail as a matter of law
Even assuming some conduct fell within the clause, we showed it could not be enforced as written. Under Nevada law a restrictive covenant is valid only so far as it is reasonable, and this one — a year long, with no geographic limit, reaching every contact regardless of involvement — was an overbroad restraint of trade. The damages fared no better: the five-figure demand was a year of subscriptions annualized, unrecoverable on an arrangement the client could cancel for convenience and expressly disclaimed by the vendor’s own limitation-of-liability terms. We paired that with our client’s affirmative claims — the vendor had suspended prepaid services and kept the client’s money with no contractual right to do so, a material breach supporting restitution and more.
Offer a clean exit while raising the cost of refusal
With the claim exposed, we gave the vendor a way out that was plainly better than proceeding. We proposed a mutual walk-away release, with our client forgoing the nominal prepaid fees they were owed as a good-faith gesture to close the matter at once. At the same time we raised the cost of refusal: a formal litigation hold and document-preservation demand, a request for the records underlying the claim, and a candid note that a client-facing business inviting public scrutiny over a demand like this had far more to lose than our client did. The offer made resolution the sensible course.
04. The outcome
Within a month of our response, the parties reached a walk-away settlement. The vendor withdrew its demand in full, the two sides exchanged a mutual release of all claims, and each bore its own fees and costs. Our client paid nothing — not the $35,000-plus the vendor had sought, and not a dollar more.
For an international client facing a cross-border claim, the result removed a real source of risk quickly and cleanly. A demand that had threatened arbitration and foreign enforcement was gone, replaced by a signed release that closed the matter for both sides. There was no arbitration, no litigation, and no enforcement proceeding abroad or anywhere else.
The outcome reflected the shape of the case. By showing that no breach had occurred, that the covenant and the damages could not be sustained, and that our client held their own claims for the vendor’s mid-term abandonment of prepaid work, we made continued pursuit far more expensive and precarious for the vendor than a clean release would be. Faced with that, it chose to walk away — which was the outcome our client had wanted from the start.
05. Key takeaways
A large demand does not always reflect your true legal exposure
A demand letter’s dollar figure is a starting position, not a measure of real exposure. Annualized “lost profits” on a subscription the customer was free to cancel often collapse under basic contract-damages principles — and the vendor’s own limitation-of-liability clause may disclaim the very damages it is trying to collect.
Non-solicitation clauses must be reasonable to be enforceable
A non-solicitation clause is only as strong as it is reasonable. A restraint with no geographic limit that sweeps in every contact regardless of involvement is vulnerable as an overbroad restraint of trade — whatever conduct the other side alleges. The wording of the clause deserves as much attention as the facts
Raising your own legal claims can strengthen settlement negotiations
Posture can matter as much as the merits. When the party demanding money has itself walked away from prepaid obligations, surfacing your own claims and preserving the record turns a defense into leverage — and can make a clean walk-away the other side’s most sensible option.
06. FAQ
Disclaimer
This case study is provided for informational purposes only and is presented in anonymized form to protect client confidentiality. Identifying details have been altered or omitted. It does not constitute legal advice and does not create an attorney-client relationship.
Prior results do not guarantee or predict a similar outcome in any future matter. Every business dispute is unique and depends on its own facts, contractual terms, and applicable law. Dollar figures are stated as conservative, rounded-down ranges to help protect client confidentiality.
Attorney Advertising. Licensed in Nevada and California · Milan Chatterjee, Esq.
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