Non-Compete Agreement
A Non-Compete Agreement can be used to prevent a party from exploiting a business' information to gain a competitive advantage. This Agreement is drafted to be executed as a deed.
4.5 (30 reviews)
Last updated December 20, 2024
Under 10 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
This document is designed to prevent a situation in which someone with access to your business’ private information and practices, uses this to start their own competing business in the same industry or for another person's benefit. For example, product design, technology and sales are industries that are hyper competitive and businesses within them require substantial protection to ensure they stay ahead of their competitors.
A Non-Compete Agreement requires the agreement of the the other party, and so is normally entered into in situations where your business has some negotiating power with the other party. The most common circumstance is when a new employee is being hired and a non-compete is presented as a condition of employment. Other instances where this document may be applicable include when business partners terminate their relationship, when a business is being sold to new owners and when a contractor’s services are no longer required.
If you are using this document for an employee, you cannot unreasonably impose a restriction that has the effect of obstructing them from earning a living. You must have a legitimate business interest to protect, such as the protection of confidential information, customer connections or stable workforce. Otherwise, your restraint may be regarded as unreasonable and become unenforceable.
The Legal Risk Score of a Non-Compete Agreement Template
Our legal team have marked this document as low risk considering:
- The document allows for the extensive definition of confidential information, which could potentially impose a heavy burden on the party receiving the information to manage and protect a wide array of data types.
- The document lacks specific remedies or compensation for the receiving party in the event that the disclosing party's information is incomplete, incorrect, or leads to infringement issues, which places the risk of using the provided information entirely on the receiving party.
- The agreement stipulates that the receiving party cannot use the information for any purpose that could be seen as detrimental to the disclosing party, a broad and subjective term that could limit the receiving party's operational flexibility.
Overall, this document is constructed to heavily favor the party providing the information, with stringent protections and control over the use and disclosure of the information. Users familiar with such agreements might find this document relatively riskier for the receiving party, as it places substantial obligations and potential liabilities on them while offering minimal recourse if the provided information is flawed or leads to legal challenges.
Non-Compete Agreement Checklist
Complete your free Non-Compete Agreement with our checklist
Ensure Proper Execution
Ensure that the document is signed by both parties to validate its enforceability as a deed.
Manage Confidential Information Carefully
Strictly adhere to the guidelines for handling confidential information as outlined in the agreement to avoid any breaches.
Monitor Compliance
Regularly review and monitor the adherence to the terms of the agreement to ensure both parties fulfill their obligations.
Prepare for Termination
Keep track of the termination provisions and prepare the necessary steps to either extend, renew, or properly conclude the agreement as per the terms specified.
Use this Non-Compete Agreement If:
- You want to protect your business’ interests and information
- You want to avoid being exploited for competitive advantage
What does this Non-Compete Agreement Cover?
- Parties to the Agreement
- Duration of Agreement
- Restricted Activities
- Confidential Information
- Confidential Obligations
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