When business ties are severed, there are lot of legal issues and concerns to be dealt with. Among these is a noncompete agreement.
A noncompete agreement is a legally binding contract between at least two parties. This is done to make sure that the people you share ideas and business practices with don’t become, work with, or for your business rivals.
These are safety precautions to make sure that your business ideas and practices remain confidential and will not be used against you should the time come that the people who entrusted them with butt heads with you or even cordially decide to leave the company.
See these Sample Agreements for more.
Sale of Business Non-Compete Agreement
Business Partner Non-Compete Agreement
Small Business Non-Compete Agreement
When entering a business, always look ahead. Always include a non-compete clause in your Business Development Agreements when partnering with another organization and in your Business Separation Agreements in the event that the partnership comes to an end.
What a Non-Compete Agreement Should Include
- The names of those involved. Make sure you put in the complete names with their respective addresses.
- The reason for the agreement. Put in why the agreement exists. For example, that Atty. H worked as a lawyer in SG Firm but has decided to leave the firm because they want to take some time off.
- For how long the agreement will be in effect. Put in the time period for which the noncompeting party (the one who is prohibited from working for or as the competitor) will be tied to the agreement.
- Specify the geographic scope for the agreement. This might be within a specific distance, a particular city or state, or the location might be described in detail.
- The compensation for the noncompeting party. Considerations (money) must be paid to the noncompeting party in exchange for not taking any new jobs for the duration of the agreement.
Confidentiality Business Non-Compete Agreement
Business Non-Compete Agreement Form Example
Company Business Non-Compete Agreement
Business Reciprocal Non-Compete Agreement Sample
Optional Clauses That May Be Included
Here are some additional terms that could be included in a nondisclosure agreement
- The noncompeting party will be prohibited from disclosing confidential and sensitive information. This could be over a period of time. Also, the noncompeting party may be required to return all properties that belong to the organization within a specified period of time.
- The noncompeting party may be disallowed from hiring any of the staff or employees of the other party for a certain time-period.
- The noncompeting party could also be prohibited from trying to court the other party’s clients for a certain period of time.
Enforcing a Noncompete Agreement
A noncompete agreement, to be enforceable, must be reasonable, and must include consideration or a payment in exchange for their agreement not to compete. Before drafting or signing a noncompete agreement, it is highly recommended that both parties should consult a lawyer for legal advice and for information on the validity of the agreement.
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