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Non-compete agreement



WHEREAS, [Name of  Company]  (“Company”) is in the business of: 

1. [Activity 1]

2. [Activity 2]

3. [Activity 3]


WHEREAS, the Representative and the Company have entered into an agreement whereby

[Person FirstName] [Person Last Name] (“Representative”) the duties would include but are not limited to: 

1. [Duty 1]

2. [Duty 2]

3. [Duty 3]

attached hereto as Exhibit A (the “Representative Agreement”);

WHEREAS, the Company desires to protect and preserve its legitimate business interests having invested considerable time and resources therein by having the Representative enter into this Agreement; and

WHEREAS, the Representative agrees to the restrictions described herein as partial consideration for Company’s promises inherent in the Representative Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and promises made by the Parties hereto, the Company and the Representative covenant and agree as follows:

1. Acknowledgement Of Relationship 

The Parties agree and acknowledge that this Agreement is granted in consideration of the promises agreed to in the Representative Agreement. The Parties further state that they are independent parties unrelated and unconnected in any way.

2. Duty Of Confidentiality

The Representative acknowledges that she/he owes a duty of confidentiality to the Company in respect of all confidential information relating to the Company  that has come into his/her possession, whether for the Company directly or from some other source, and the intellectual property and copyrights owned by the Company.

3. Work Product 

The Representative agrees that all work product developed, created or collaborated on by the Representative for the Company during the term of the engagement with the Company is and shall be considered a work made for hire and that the Company is the sole owner of all rights, including intellectual property and copyright, in and to the work product.

4. Non- Competition

For a period of [years/months] (“Restricted Period”) after the Effective Date of this Agreement, the Representative agrees and covenants with the Company: (a) that the Representative shall not work as an employee, officer, director, partner, consultant, agent, owner, or in any other capacity in or for any entity or business that is in competition with the Company or which deals in any products and services similar to those of the Company; (b) that the Representative shall not directly or indirectly engage or participate in any kind of business activity that in any way competes with the Business of the Company; (c) not to use or deal in any confidential information, intellectual property or work product of the Company whether for profit or otherwise and (d) that the restrictions stated in this Clause 4 shall apply in [define geographic area]. The Parties agree that the intent of this provision is to allow the Company to protect its legitimate business interests in relation to future business opportunities which relate to its Business and its products and services. This provision is not intended to prevent the Representative from taking advantage of business opportunities that do not relate to the Business or the Company or to it or products and services or those similar to such products and services.

5. Non-Solicitation

For the duration of the Restricted Period, the Representative shall not directly or indirectly: (a) solicit any business away from the Company or in any way interfere with the customers of the Company so as to induce, encourage or intimidate them to stop dealing with the Company; (b) supply, provide, license any products or services to the customers of the Company which it already offers or makes available to its Customers or which the Representative is aware that the Company is working on or about to introduce to its customers; (c) solicit, induce or lure any employee, agent or contractor of the Company to terminate their employment or engagement with the Company; and (d) solicit, induce or lure any supplier of the Company to stop supplying its products and services to the Company or to supply to a competitor or supply directly to the customers of the Company. The restriction shall extend to any attempts or efforts to do any of these acts.


The Representative hereby agrees that unless consented to by the Company, the Representative shall not: (a) during the Restricted Period for any reason attempt to contact or initiate contact at any time, and for any purpose, either directly or indirectly, with any officers, directors, shareholders, consultants, attorneys, employees, agents, affiliates, suppliers, customers or other such parties of the Company with the intent or purpose of circumventing any provision of this Agreement or any of the restrictions imposed pursuant to it; (b) attempt to solicit any confidential information, intellectual property or copyright from such persons or entities nor induce any employee or independent contractor of the Company to disclose such information or property or provide any information of whatever nature to any party that would enable such party to undertake such actions, whether successfully or not; and (c) the Representative will not use any confidential information that came into the possession of the Representative in such capacity for the purpose of establishing any commercial activity whether directly or indirectly or in person or through a corporate entity.

7. Right To Injunctive Relief

7.1  The Representative agrees and acknowledges that: (a) irreparable damage or harm could occur to the Company, whether financial or otherwise, in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or were otherwise breached by the Representative; and (b) the extent of the damage or harm may not be readily ascertainable and a remedy at law may not be adequate. 

7.2  The Parties hereby agree that, except where this Agreement is mutually terminated by the Parties in writing, the Company shall during the Restricted Period, without the necessity to show any actual damage or economic loss, be entitled to: (a) seek an injunction or injunctions to prevent breaches or threatened breaches of this Agreement by the Representative: and/or (b) to specifically enforce the terms and provisions of this Agreement, and any other agreement or instrument executed in connection with this Agreement. 

7.3  The Company shall be under no obligation to seek any alternative remedies before seeking injunctive relief. The Representative irrevocably waives any requirements for securing or posting of any bond in connection with any such remedy and agrees that such injunctive relief shall be cumulative to any other legal or equitable remedies available to the Company. 

8. Disclosure Of Confidential Information

During the Restricted Period the Representative shall not directly or indirectly at any time or in any manner divulge, disclose, or communicate any information or intellectual property that is proprietary to the Company and the Representative agrees to protect any such information and to treat it as strictly confidential. 

9. Representative Acknowledgments

The Representative acknowledges that: (a) this Agreement has been specifically bargained between the Parties; (b) the Representative has had the opportunity to obtain legal counsel to review this Agreement; (c) the restrictions imposed are fair, reasonable, and necessary to protect the legitimate business interests of the Company; and (d) such restrictions will not place an undue burden upon the Representative’s livelihood in the event of enforcement of the restrictions described.

10. Entire Agreement

This Agreement and any relevant provisions in the Representative Agreement set out the entire agreement and understanding between the Parties relating to the subject matter of this Agreement, and there are no other conditions, promises, representations or undertakings between the Parties whether oral or written.

11. Severability

The Parties have made attempts to limit the scope of this Agreement so that it applies only so far as deemed necessary to protect the legitimate business and intellectual property of the Company. The Parties agree that if any provision of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be unaffected and shall continue to be valid and enforceable. Should a court determine that any provision is invalid or unenforceable for any reason, but that by limiting such provision the balance of it would become valid, and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

12. Duration

This Agreement shall expire at the end of the Restricted Period unless terminated earlier or extended by mutual agreement of the Parties in writing.

13. Amendment 

This Agreement may only be amended by mutual agreement of the Parties in writing.

14. Waivers

A waiver of a breach of any term of this Agreement or of a default by any Party shall not constitute or be deemed to be a waiver of any other breach or default that may already have occurred, or which may occur. Unless consideration has been received, any such waiver shall not preclude the Party making the waiver from subsequently requiring compliance with the waived obligation or default.

15. Delays, Indulgences And Omissions

A delay or indulgence or omission in exercising any right, power or remedy shall not be construed as a waiver.

16. Notices

Any notice pursuant to this Agreement shall be in writing and may be sent by: (a) regular mail to the other Party at the address stated in this Agreement and shall be effective 2 days from the date of dispatch; or (b) if permitted in the jurisdiction, by email or other means of written/printed digital means of communication and such notice shall be deemed to be effective 24 hours after dispatch.

17. Successors

The provisions of this Agreement shall be binding on and inure for the benefit of the Parties and their respective successors and assigns and legal representatives.

18. Costs

The parties agree that they shall each bear their own respective costs for the preparation and negotiation of this Agreement.

19. Applicable Law

This Agreement and the interpretation of its terms shall be governed by and construed in accordance with the laws of the State of [State] and subject to the exclusive jurisdiction of the federal and state courts located in [County], [State].

IN WITNESS WHEREOF, each of the Parties has executed this Agreement both Parties personally or by their duly authorized officer (as appropriate), as of the day and year set forth below.

User Note: Users of this template Agreement should note that courts in general are not in favor of documents with restrictive covenants, particularly where related to employment situations and they generally interpret such documents very narrowly. To gain maximum value from this document, users should take a reasonable approach in respect of: (a) the Restricted Period – what is the reasonable period required to protect a legitimate business interest? The longer the period the more likely it will be struck down; (b) the Restricted Area - what is the reasonable geographic area required to protect a legitimate business interest? This will very much depend on the nature of the user’s business. For a one person non-franchise hair salon located in an outer suburb of Houston, it would be difficult justify a restriction applicable to the whole of Texas. Conversely, a small one person online business with numerous customers around the world could justify a worldwide restriction. The narrower the restriction, the more likely it will be upheld.

The User Note is intended for guidance only and does not in any way constitute legal advice and Users should treat it accordingly.

Template does not constitute any form of legal advice, and the User is at all times encouraged to request external specific legal advice in respect of the execution of legal documents.
Non-compete agreement

Use our free non-compete agreement template to outline the agreement between two parties to protect and preserve your business interests.

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What is a non-compete agreement?

A non-compete agreement is a formal contract between your business and an employee. Depending on the context, they can take various forms and cover multiple scenarios, including:

  • They prohibit employees from working in a competing business besides their primary role.
  • They prohibit employees from working for a competitor or in your industry for a specific period after leaving.
  • Non-solicitation prohibits employees from approaching your customers, contractors, clients, and employees for a specific period after leaving your employment.
  • Non-disclosure of confidential information is better dealt with by having a specific, standalone Non-Disclosure Agreement in place.

Before creating a non-compete agreement, consider how enforceable it will be. For example, courts worldwide often disregard non-compete agreements prohibiting individuals from earning a living. However, many see non-solicitation elements as being reasonable.

What should be included in a non-compete agreement?

What you include in your non-compete agreement will depend mainly on the reason and context in which you plan to use it.

In addition to the standard legal clauses and conditions you will find in our template, your non-compete agreement should also include:

  • Details of both parties and what they do. In addition to the names and addresses of both parties, you should also include details of what services or products your business provides and the duties of the person subject to the non-compete agreement. This helps provide context around the purpose of the non-compete agreement and may be vital should a dispute end up in court, so make sure this is as detailed as possible!
  • Non-Competition Clause. You are creating a non-compete agreement, so this is your most vital clause! Detail the period the non-compete agreement will be in effect and define whether it only applies to a specific geographic area. Depending on the type of non-compete agreement you wish to create, you may delete this section within your Contractbook account and instead focus on the Non-Solicitation and Non-Circumvention clauses. Whichever clauses you include, ensure you detail the timeframes around which they are active.
  • Governing law. Provide details under which legal jurisdiction your non-compete agreement will be governed.

When should I use a non-compete agreement?

Non-compete agreements should be used with other documents, such as a business proposal, a freelance contract, and a non-disclosure agreement. In addition, it is good practice to provide a non-compete agreement to the other party at the earliest opportunity. Depending on the details you include, there may be a significant amount to renegotiate or some aspects that even put any deal at risk.

Why use a non-compete agreement?

A non-compete agreement can protect your business's interests and prevent employees from significantly damaging your company upon departure.

Suppose you plan to work with a consultant or agency on a specific aspect of your business. In that case, a non-compete agreement can protect you if another company seeks the same consultant's services.

How does a non-compete agreement work?

If a non-compete agreement is structured and written well, it should be clear how it works. Any quality non-compete agreement template that a company asks all future employees to sign should detail with no room for confusion what happens if a person goes to work for a competitor or how they are to be compensated should they need to take a gardening leave. The agreement should also detail how the agreement becomes void and what circumstances trigger that. It should also outline the conditions of a person subject to a non-compete agreement after termination as opposed to resignation. 

Advantages of a non-compete agreement 

Firstly, like all pieces of legal documentation, writing it down in black and white clearly outlines what is expected of both sides. That clarity can strengthen the working relationship and ensure the agreement is abided by. 

That is further reinforced by the fact that the agreement should clearly outline what will happen if there is a breach of the contract. In the instance of the employee, they know the legal ramifications should they break the non-compete agreement. However, they also can negotiate the deal beforehand to be happy with the terms and conditions involved. While the clauses in a non-compete agreement are often restrictive, the employee still needs to ensure they are 100% happy to put their signature to such conditions. 

Ultimately, non-compete agreements are suitable for companies as they help protect their company-specific data. By acting in full confidentiality, companies can maintain their competitive edge in the industry they work in, as they can expect their employees not to take their insider secrets with them to another firm. 

Contractbook and non-compete agreement

At Contractbook, any well-structured agreement or contract has the potential to be powerful. The Non-Compete Agreement is an excellent example of that. It can help protect both a company’s and employee’s rights so that what is left is a healthy working relationship based on trust and respect.

Where and how can a non-compete agreement be used?

Use Contractbook’s non-compete agreement whenever you need to safeguard your business’s interests. Our template contains all the critical legal clauses you should include in a non-compete agreement, so all you need to do is add the relevant details via our forms. Your non-compete agreement will be ready to use, sign, and store in your Contractbook account. While this non-compete agreement template is primarily designed for use where you want to stop an employee or contractor from working for a competitor, when you sign up for Contractbook, you can edit all aspects of the template to tailor it 100% to your needs.

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