Non-Compete Agreement - Template, Sample Form Pro · AU-law

NON-COMPETE AND RESTRAINT OF TRADE AGREEMENT

THIS NON-COMPETE AND RESTRAINT OF TRADE AGREEMENT (the "Agreement") is made and effective as of ________ (the "Agreement Date").

BY AND BETWEEN THE PROTECTED PARTY (hereinafter "Protected Party"):

________ (ACN/ABN ________), of the following address:

________

AND THE RESTRICTED PARTY (hereinafter "Restricted Party"):

________ (ACN/ABN/ID ________), of the following address:

________

(referred to herein collectively as the "Parties" and individually as a "Party")

(1) BACKGROUND

(a) For the purposes of this Agreement, "the Business" means the following business carried on by the Protected Party:

________

(b) The Parties are currently engaged, or intend to engage in the future, in a business relationship of the following nature ("the Business Relationship"): ________.

(c) The Restricted Party may, whether during the Business Relationship or after the Business Relationship has terminated, have an opportunity to obtain an unfair competitive advantage over the Business or to compete with the Business in a manner that may cause harm or damage to the Protected Party.

(d) The Parties enter into this Agreement in order to protect the legitimate business interests of the Protected Party, the Parties acknowledging that the restraints contained in this Agreement are reasonable and go no further than is reasonably necessary to protect those interests.

(2) CONSIDERATION

In consideration of the mutual promises and obligations contained in this Agreement, and in particular the commitments and obligations undertaken by the Restricted Party, the Restricted Party will receive the following valuable consideration, the receipt and adequacy of which are hereby acknowledged:

________

(3) NON-COMPETE COVENANT

(a) During the Business Relationship and for the Time Period (as described in the "Time Period" clause of this Agreement), the Restricted Party will not, within the Geographic Area, directly or indirectly engage in any business that competes with the Business.

(b) For the purposes of this Agreement, engaging in any business that competes with the Business includes, but is not limited to:

(I) carrying on a business as owner, partner, principal or agent;

(II) becoming an employee, director, officer or consultant of any third party that is engaged in such business;

(III) becoming interested directly or indirectly (whether as a shareholder, financier or otherwise) in any such business; or

(IV) soliciting any customer or client of the Protected Party for the benefit of a third party that is engaged in such business.

(c) The Restricted Party agrees and acknowledges that the restraints in this Agreement are reasonable in scope, duration and geographic extent, and are no greater than is reasonably necessary to protect the legitimate interests of the Protected Party.

(d) This covenant shall apply to the geographic area as described in the "Geographic Area" clause of this Agreement (the "Geographic Area").

(e) The Parties acknowledge that, where this Agreement is governed by the law of New South Wales, the operation of this clause and of the restraints contained in this Agreement is subject to the Restraints of Trade Act 1976 (NSW), and that any restraint that is void or unenforceable may be read down to the extent necessary to render it valid and enforceable.

(4) NON-SOLICITATION COVENANT

(a) During the Business Relationship and for the Time Period, the Restricted Party will not directly or indirectly solicit business from, or attempt to sell, license, or provide the same or similar products or services as are now provided by the Protected Party to, any customer or client of the Protected Party.

(b) During the Business Relationship and for the Time Period, the Restricted Party shall not use the Protected Party's existing client base, customer demographic or Confidential Information to solicit, provide quotes to, or transfer business to any competing entity.

(c) During the Business Relationship and for the Time Period, the Restricted Party will not directly or indirectly solicit, induce, or attempt to induce any employee or contractor of the Protected Party to terminate his or her employment or engagement with the Protected Party.

(5) CONFIDENTIALITY

(a) The Restricted Party acknowledges and agrees that the Restricted Party may have, or may have had, access to information that is confidential and/or commercially valuable to the Protected Party ("Confidential Information"), which may include but is not limited to:

(I) information of whatever nature relating to the business activities, practices and finances of the Protected Party;

(II) any evaluation material, design work, technologies, technological ideas or strategies, strategic plans, marketing strategies, innovations, creative plans, concepts and any other plans or ideas developed by or on behalf of, or used by, the Protected Party, whether relating specifically to the Business or otherwise;

(III) any personal information within the meaning of the Privacy Act 1988 (Commonwealth) held by the Protected Party;

(IV) any information derived from any other information which falls within this definition of Confidential Information; and

(V) any copy of any Confidential Information,

but does not include information which:

(I) was known to or in the possession of the Restricted Party before it was provided to the Restricted Party by the Protected Party, provided that it was known or in the possession of the Restricted Party through legal means and not as a result of any breach of this Agreement or any other obligation of confidentiality;

(II) is, or becomes, publicly available through no fault of the Restricted Party;

(III) is or was provided to the Restricted Party without restriction on disclosure by a third party who did not breach any confidentiality obligation in making such disclosure;

(IV) is or was provided to the Restricted Party by the Protected Party and marked "Non Confidential"; or

(V) is required by law, regulation or a court, tribunal or regulatory authority to be disclosed, but only to the absolute minimum extent necessary and provided that the Protected Party is, where lawful and practicable, first consulted as to whether and how far it is possible to prevent or restrict such disclosure.

(b) During the Business Relationship and at all times thereafter, the Restricted Party shall keep the Confidential Information confidential and secret.

(c) The Restricted Party shall only use the Confidential Information in accordance with the purpose for which it was provided by the Protected Party, or as otherwise directed by the Protected Party.

(d) Where any personal information is dealt with under this Agreement, the Restricted Party shall comply with the Privacy Act 1988 (Commonwealth) and the Australian Privacy Principles.

(e) If there is any doubt as to whether any particular information constitutes Confidential Information, the Restricted Party shall presume it is Confidential Information until the Restricted Party obtains explicit confirmation from the Protected Party that it is not.

(f) This clause will survive termination or expiration of this Agreement.

(6) TIME PERIOD

(a) For the purposes of this Agreement, "the Time Period" means, from the date of termination of the Business Relationship, the following period (or, if more than one is specified, the maximum of the following periods that is held by a court of competent jurisdiction to be valid and enforceable): ________, being one of the following cascading periods:

(I) twelve (12) months;

(II) six (6) months;

(III) three (3) months;

(IV) two (2) months;

(V) one (1) month,

provided that each period contained in this definition of "the Time Period" constitutes a separate, severable and independent provision. In the event that a court of competent jurisdiction determines that any of these independent provisions is unenforceable in whole or in part, the enforceability of the remainder of that provision or of any other provision will not be affected, and the restraint shall apply for the next shorter period which is valid and enforceable.

(b) This clause will survive termination, expiration or completion of this Agreement.

(7) GEOGRAPHIC AREA

(a) For the purposes of this Agreement, "the Geographic Area" means the area within a radius from the Protected Party's address of the following distance (or, if more than one is specified, the maximum of the following distances that is held by a court of competent jurisdiction to be valid and enforceable): ________, being one of the following cascading distances:

(I) ten (10) kilometres;

(II) five (5) kilometres;

(III) four (4) kilometres;

(IV) three (3) kilometres;

(V) two (2) kilometres;

(VI) one (1) kilometre,

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(b) This clause will survive termination, expiration or completion of this Agreement.

(8) ENTIRE AGREEMENT

This Agreement contains the entire agreement of the Parties regarding the subject matter of this Agreement, and supersedes all prior negotiations, representations, understandings and agreements, whether oral or written. There are no promises, terms, conditions or obligations other than those contained in this Agreement.

(9) SEVERABILITY

If any provision of this Agreement, or the application of such provision to any person or circumstance, is held to be invalid, illegal or unenforceable in whole or in part by a court of competent jurisdiction, the remaining provisions of this Agreement, and the application of such provision to persons or circumstances other than those to which it is held invalid, illegal or unenforceable, shall not be affected and shall continue in full force and effect.

In the event that any provision of this Agreement is held to be invalid, illegal or unenforceable, the Parties agree that such provision shall be deemed to be modified, restricted or limited (including, where applicable, read down pursuant to the Restraints of Trade Act 1976 (NSW)) to the minimum extent necessary to render it valid and enforceable, so as to give effect to the original intention of the Parties as nearly as possible.

This clause will survive termination or expiration of this Agreement.

(10) INJUNCTION

(a) The Parties agree that if the Restricted Party breaches or threatens to breach the terms of this Agreement, irreparable harm is likely to occur and damages may be inadequate to compensate the Protected Party.

(b) In the event of an actual or threatened breach of this Agreement, the Protected Party will be entitled to seek injunctive relief to enforce the terms of this Agreement, in addition to any other remedy available at law or in equity.

(c) In any litigation arising under this Agreement, the prevailing Party shall, subject to any order of the court, be entitled to recover from the other Party its reasonable costs, necessary disbursements and legal fees incurred in enforcing this Agreement.

(11) WARRANTIES REGARDING COMPETITION

(a) Each Party respectively warrants:

(I) that this Agreement does not constitute or relate to a contract, arrangement, understanding or concerted practice that has the purpose, or has or is likely to have the effect, of substantially lessening competition contrary to the Competition and Consumer Act 2010 (Commonwealth) ("CCA");

(II) that this Agreement does not relate to any exclusive dealing for the purpose, or with the effect or likely effect, of substantially lessening competition contrary to the CCA;

(III) that this Agreement does not relate to any cartel conduct involving "price fixing" contrary to the CCA, whereby competitors fix, control or maintain prices rather than competing against each other;

(IV) that this Agreement does not relate to any cartel conduct involving "output restrictions" contrary to the CCA, whereby competitors prevent, restrict or limit the volume or type of goods or services available;

(V) that this Agreement does not relate to any cartel conduct involving "market sharing" contrary to the CCA, whereby competitors divide or allocate customers, suppliers or territories among themselves; and

(VI) that this Agreement does not relate to any cartel conduct involving "bid rigging" or "collusive tendering" contrary to the CCA, whereby competitors agree not to compete genuinely for tenders.

(b) This clause will survive termination or expiration of this Agreement.

(12) WARRANTIES REGARDING LEGAL ADVICE

(a) Each Party (referred to in this clause as the "Warranting Party" as the context requires) respectively warrants:

(I) that the Warranting Party fully understands the terms of this Agreement;

(II) that the Warranting Party has had the opportunity to obtain independent legal advice in relation to the matters addressed by this Agreement and the Warranting Party has either:

(A) taken such independent legal advice; or

(B) elected not to take such independent legal advice; and

(III) that the Warranting Party has not been induced to enter into this Agreement by any representation made by the other Party or by any officer, employee, director, agent, contractor, assignee, successor or other representative of the other Party, except as expressly provided in this Agreement.

(b) This clause will survive termination or expiration of this Agreement.

(13) APPLICABLE LAW AND JURISDICTION

(a) This Agreement is governed by and shall be construed in accordance with the laws in force in ________, Australia.

(b) Each Party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of ________ and the courts competent to determine appeals from those courts.

(14) BINDING

The provisions of this Agreement shall be binding upon and inure to the benefit of both Parties and their respective legal representatives, successors and permitted assigns.

(15) SURVIVAL OF OBLIGATIONS

Notwithstanding any other provision of this Agreement, upon the termination, expiration or completion of this Agreement, any provisions of this Agreement which would by their nature be expected to survive such termination, expiration or completion shall remain in full force and effect, including but not limited to any provisions which are expressly stated to survive termination, expiration or completion.

(16) NO WAIVER

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(17) COUNTERPARTS

This Agreement may be executed in any number of counterparts, including by electronic means, each of which when executed and delivered constitutes an original, but all of which together constitute one and the same agreement. If the dates of signing differ, this Agreement takes effect on the date on which the last Party signs.

(18) FURTHER ACTS

Each Party must, and must ensure that its directors, employees, officers, agents, representatives and contractors, do all things and sign, execute and deliver all documents, agreements and instruments reasonably required to give effect to this Agreement and to the rights and obligations of the Parties created under it.

EXECUTED AS AN AGREEMENT ON ________

Signed for and on behalf of ________ in accordance with section 127(1) of the Corporations Act 2001 (Commonwealth) by:

___________________________________
Signature of director

Name of director: ________

___________________________________
Signature of director/secretary

Name of director/secretary: ________

Date: ________

Signed for and on behalf of ________ in accordance with section 127(1) of the Corporations Act 2001 (Commonwealth) by:

___________________________________
Signature of director

Name of director: ________

___________________________________
Signature of director/secretary

Name of director/secretary: ________

Date: ________

Where the Restricted Party is an individual, signed by:

___________________________________
Signature of Restricted Party

Name: ________

Date: ________

___________________________________
Signature of witness

Name of witness: ________

Address of witness: ________