A non-compete agreement is an agreement that is made legally in order to protect people who shares ideas on the same business fields. This kind of situation happens whenever two persons run a business for certain period of time, but for the sake of protecting each other just in case there is a separation between them in the future. By making this agreement, there will be no competition between the two persons though both of them do not work at the same company anymore. Anyone who is interested in having a business partner should start by learning from a non-compete agreement template.
Certain Conditions when a non-compete agreement is needed
As stated before, a non-compete agreement is aimed at protecting two persons or some people that work at the same place and share ideas on business, but they have to separate in the future. Any information and ideas that are shared will give loss to one or more parties if the other parties compete against them. The following situations will make it clearer.
• There is a professional relationship between an employer and an employee that makes them share information and ideas related to the business of the company. Whenever they decide to terminate the professional relationship, for example because the employee wants to move to other company or wants to build his own business, then it will be beneficial for the employer to have an agreement that the employer cannot build a business against the employer’s business.
• There is a professional relationship and cooperation between two companies. Whenever the cooperation is over, then it will be safe to have an agreement that forbids them to do any business that fights against each other.
Some Important Things to Include
There are many things that can be included in a non-compete agreement, but the following things are the basic information to be written out clearly in the agreement.
• The date when the agreement is effective
• The parties that are bound by the agreement including their names and addresses.
• The reason that cause the two parties to make the agreement, for example because one of them will build his own business.
• The compensation that will be given to the parties because of the agreement, which is exactly about how much money that will be paid to the party who leaves the business.
• The geographic area that the agreement will cover, so that the business market of the parties in the agreement will be protected.
Below is one sample found in internet you can use as your company reference. Please consult your legal advisor if you want to create a better non compete agreement that should protect all of your company interests.
Not Compete Agreement Template (27.5 KiB, 545 hits)