Non-compete agreement template
Set out limits on competing after a working relationship ends.
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About Non-compete agreement
A non-compete agreement is a contract where one person agrees not to compete with a business for a period of time and within a certain area after their working relationship ends. It usually describes what activity is restricted, how long the limit lasts, and where it applies.
This page is a general template and a convenience for drafting, not legal advice, and for important matters consult a qualified professional in your jurisdiction. Whether and how a non-compete can be enforced varies a lot by state, and some places limit or ban them, so confirm the rules where you are before you rely on this document.
Who needs to complete it
- Employers who want to limit competition from a departing employee.
- Businesses protecting client relationships or trade know how.
- Buyers of a business who want the seller not to compete.
- Anyone asked to sign or prepare a non-compete and wanting to see the terms.
How to fill out Non-compete agreement
- 1Enter the date and the names and addresses of the business and the person agreeing to the restriction.
- 2Describe the working or business relationship the agreement is tied to.
- 3State the activity that is restricted, such as working for a direct competitor.
- 4Set the time period the restriction lasts after the relationship ends.
- 5Set the geographic area where the restriction applies.
- 6Describe anything given in return, such as employment, pay, or the sale of a business.
- 7Add how disputes are handled and which location's rules the parties intend to apply.
- 8Have both parties review, sign, and date the agreement, and keep a copy each.
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Frequently asked questions
Are non-compete agreements enforceable?
It depends heavily on where you are. Some places enforce reasonable ones, others limit or ban them. This page is a general template and a convenience, not legal advice, and for important matters consult a qualified professional in your jurisdiction.
What makes a non-compete more likely to hold up?
Where they are allowed, courts often look at whether the time period, area, and restricted activity are reasonable and tied to a real interest. Overly broad terms are more likely to be challenged.
What is consideration in a non-compete?
It is what the person receives in return for agreeing to the limit, such as a job, pay, or the purchase price of a business. Many places require some consideration for the agreement to be valid.
How is this different from an NDA?
A non-compete limits competing after the relationship ends. An NDA protects confidential information. Some agreements include both types of terms.