Vendor Non Compete Agreement Sample

When assessing the adequacy of a non-competition clause, the Court shall take into account the duration and geographical scope of the agreement, the specific activity of the supplier excluded by the agreement, the need for the agreement and the commercial interest protected by the agreement. The need for the agreement relates to a legitimate commercial interest that needs to be protected, such as, for example. B the protection of trade secrets. The Court also takes into account the effect of the non-application of the agreement on that interest, such as, for example. B loss of a competitive advantage resulting from a trade secret. Legitimate business interests include the protection of goodwill, trade secrets and confidential information. Part of the agreement provides that employees are not allowed to disclose this sensitive information to a competing company. In many cases, there would be a period (usually a year or two) during which the outgoing employee would not be able to work for a competitor. The schedule ensures that critical information cannot be shared with competitors. Where a business relationship between two parties is likely to be misused for competitive advantages, a non-compete clause should be considered. A non-compete clause prevents a seller from competing with a customer`s business or providing goods or services to the customer`s direct competitors. Companies require such agreements from suppliers whose relationship with a competitor could allow or make it likely that it will disclose its customer`s trade secrets.

The non-competition clause is also necessary if the seller`s products or services are an integral part of his customer in such a way that the customer`s activity would be harmed by the end of the customer-supplier relationship. A company also needs the agreement when it allows a provider to access a large amount of important information that, when passed on to a competitor, could harm the business in different ways. If you had one in the city of Chicago, it could include only businesses within the city limits and not the extended suburbs. The time frame for the agreement should also be reasonable – usually a period of one or two years. As long as they meet certain conditions, non-compete obligations are legally enforceable. Conversely, if a non-competition clause is found to be unnecessarily anti-competitive, it is likely to be overlooked by a court. To be legally enforceable, a non-competition clause must be proportionate to competition law, reasonable restrictions and duration and must be necessary to protect the undertaking. That is why it is important, when designing, that you are very specific and that all laws are followed to the letter. These are agreements that are an excellent way to protect commercial interests.

But they must be formulated in a fair manner so that workers` rights are also taken into account. The purpose of a non-competition clause is generally to protect an employer by preventing a worker from working for a close competitor or acting independently in the same sector. . . .

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