A short-form, neutral agreement under which one party, in the context of a business relationship or discussions (for example, a collaboration, sale or sharing of know-how), agrees not to compete with, or solicit the clients or staff of, the other party for a limited period. Governed by the law of England & Wales.
How to use this template, read this first - Replace every
[SQUARE-BRACKET]field before use. - Like employment covenants, commercial restraint-of-trade clauses are enforceable only so far as reasonable to protect a legitimate business interest, and no wider than necessary in duration, geography and scope. (Courts generally allow somewhat wider protection between commercial parties of comparable bargaining power than against an employee, but the restriction must still be justified.) - Tie the restrictions to the specific business interest being protected, and keep the period proportionate. - Have a solicitor review before use.
---
THIS AGREEMENT is made on [DATE]
BETWEEN (1) [PROTECTED PARTY NAME] of [ADDRESS] (the "Protected Party"); and (2) [RESTRICTED PARTY NAME] of [ADDRESS] (the "Restricted Party").
Background
The Parties are [discussing / engaged in] [DESCRIBE THE RELATIONSHIP, e.g. a potential collaboration / the sharing of confidential business information] (the "Relationship"). In return for [access to the Protected Party's clients / confidential information / £CONSIDERATION], the Restricted Party agrees to the restrictions below.
Agreed terms
1. Definitions.
- "Restricted Period": [NUMBER] months from [the date of this Agreement / the end of the Relationship].
- "Restricted Business": the business of [DESCRIBE the specific products/services to be protected].
- "Restricted Area": [DESCRIBE, where relevant].
- "Relevant Clients/Staff": clients, prospective clients or staff of the Protected Party with whom the Restricted Party dealt, or about whom it gained confidential information, through the Relationship.
2. Non-solicitation of clients. During the Restricted Period the Restricted Party will not solicit or entice away any Relevant Client for the purpose of the Restricted Business.
3. Non-dealing. During the Restricted Period the Restricted Party will not deal with or supply competing goods or services to any Relevant Client.
4. Non-poaching of staff. During the Restricted Period the Restricted Party will not solicit or entice away any key member of the Protected Party's staff.
5. Non-compete. During the Restricted Period the Restricted Party will not carry on or be engaged in the Restricted Business within the Restricted Area [where this is necessary to protect the Protected Party's legitimate interests].
6. Confidentiality. The Restricted Party will keep the Protected Party's confidential information secret (in addition to these covenants).
7. Reasonableness and severance. The Parties agree these restrictions are reasonable to protect the Protected Party's legitimate business interests. Each restriction is separate and severable; if any is held unenforceable, the others continue.
8. Remedies. The Restricted Party acknowledges that damages may not be an adequate remedy for breach and that the Protected Party may seek injunctive relief.
9. Governing law and jurisdiction. This Agreement is governed by the law of England and Wales, whose courts have jurisdiction.
Signatures
Signed for [PROTECTED PARTY]: __________________ Date: [DATE] Signed for [RESTRICTED PARTY]: __________________ Date: [DATE]
--- This template is a starting point and not legal advice. The enforceability of restraint-of-trade clauses depends on their reasonableness in the specific commercial context, have a qualified solicitor review and adapt it before use. Governing law: England & Wales.