Non-Compete Clause
Also called: Restrictive Covenant · Non-Competition Agreement
A non-compete clause restricts a party from competing with the other after the relationship ends — typically for a defined period, within a defined geography, and in a defined line of business. Enforceability depends heavily on how narrowly those limits are drawn.
In more detail
Non-competes are the most jurisdiction-dependent clause in common commercial use. Some legal systems enforce reasonable, narrowly scoped post-employment restraints; others substantially restrict or refuse to enforce them; some permit them only where the restrained party receives separate consideration.
Where they are enforceable, reasonableness is generally assessed across three dimensions: duration, geographic scope, and the range of restricted activity. A restraint broader than needed to protect a legitimate business interest is the most common reason one fails.
A non-compete is often confused with non-solicitation, which is narrower and generally more enforceable — it restricts approaching specific clients or employees rather than working in the sector at all.
This is the clause where governing law matters most. The same wording can be fully enforceable in one jurisdiction, narrowed by a court in another, and void in a third. Never assume a non-compete travels across borders unchanged.
What our lawyers check
- Duration, geography, and activity scope — and whether each is defensible
- Whether a narrower non-solicitation clause would achieve the same commercial goal
- Whether any separate consideration is provided for the restraint
- How the clause interacts with confidentiality and IP obligations that may already cover the real risk
Contracts where this clause matters
Related terms
This definition is general information about commercial contracting practice, not legal advice. How a clause operates depends on the specific wording of your agreement and the law that governs it. For advice on your contract, have it reviewed by a lawyer.
All glossary terms