Non-Compete Agreement - Template, Sample Form Online Pro · IN-law

NON-COMPETE AND CONFIDENTIALITY AGREEMENT

THIS NON-COMPETE AND CONFIDENTIALITY AGREEMENT (the "Agreement") is made and executed on ________, at ________, ________;

BY AND BETWEEN

________, son/daughter/wife of ________, aged ________ years (PAN No: ________; Aadhaar No: ________), residing at / with correspondence address at: ________ (hereinafter referred to as the "Restricted Party", which expression shall, unless repugnant to the meaning or context thereof, mean and include his/her heirs, legal representatives, successors and permitted assigns) of the ONE PART;

AND

________, a company incorporated under the Companies Act, 2013 (or its predecessor enactment) bearing Corporate Identity Number (CIN) ________ and PAN ________, having its registered/principal office at: ________ (hereinafter referred to as the "Protected Party", which expression shall, unless repugnant to the meaning or context thereof, mean and include its affiliates, group companies, sister concerns, subsidiaries, holding company, its successors and permitted assigns) of the OTHER PART.

The Restricted Party and the Protected Party are hereinafter individually referred to as a "Party" and collectively as the "Parties".

RECITALS

WHEREAS the Protected Party is engaged in the following business: ________;

AND WHEREAS the Restricted Party is engaged by the Protected Party in the role/capacity of: ________, with effect from ________;

AND WHEREAS in the course of such engagement the Restricted Party has or may have access to the trade secrets, confidential information, business methods, customer and supplier relationships, and other valuable proprietary assets of the Protected Party, and the Protected Party is desirous of protecting the same;

AND WHEREAS the Parties are entering into this Agreement having due regard to Section 27 of the Indian Contract Act, 1872, and the Parties expressly acknowledge that the covenants relating to non-competition contained in Clause 1 are intended to operate only during the subsistence of the business relationship, while the covenants relating to non-solicitation, confidentiality and protection of trade secrets are intended to operate both during and after the said relationship to the extent permissible under applicable law.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. COVENANT NOT TO COMPETE (DURING ENGAGEMENT)

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1.2. For the purposes of this Agreement, a "Competitive Business" means a business that derives ________% or more of its revenue from the market in which the Protected Party provides products and/or services as on the date of cessation of the business relationship.

1.3. The Parties acknowledge that under Section 27 of the Indian Contract Act, 1872, an agreement that restrains a person from exercising a lawful profession, trade or business after the cessation of the relationship is, to that extent, void. Accordingly, the restraint contained in this Clause 1 shall operate only during the term of the business relationship and within the territory of ________.

2. COVENANT NOT TO SOLICIT

During the term of the business relationship and for a period of ________ months from the date of its cessation, the Restricted Party shall not, for his/her own benefit or for the benefit of any other person, association, partnership or company: (a) solicit, canvass or accept the business of any person who is or was, at any time during the twelve (12) months preceding such cessation, a customer or supplier of the Protected Party; (b) interfere with or seek to disrupt the business relationship between the Protected Party and any of its customers, suppliers or other business associates; or (c) directly or indirectly induce, solicit or attempt to induce any employee, consultant or service provider of the Protected Party to terminate his/her employment or engagement, or engage or employ any such person who has left the employment or engagement of the Protected Party during the preceding twelve (12) months.

3. CONFIDENTIAL INFORMATION AND TRADE SECRETS

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3.2. The Restricted Party recognises and acknowledges that the Confidential Information and trade secrets constitute a valuable and unique asset of the Protected Party and shall at all times remain its exclusive property, and undertakes to maintain the confidentiality thereof and not to disclose the same, in whole or in part, to any person, firm, company or other entity for any reason whatsoever.

3.3. To the extent the Restricted Party processes any personal data on behalf of the Protected Party, the Restricted Party shall comply with the Digital Personal Data Protection Act, 2023 and all applicable rules and regulations made thereunder, and shall not use, retain or transfer any such personal data except as authorised by the Protected Party.

4. CONSIDERATION

The Parties agree that the covenants set out herein are made in consideration of the engagement/employment opportunity and/or project awarded to the Restricted Party by the Protected Party, and of a sum of Rs. ________ (________) paid/agreed to be paid by the Protected Party, the receipt and sufficiency of which is acknowledged.

5. REMEDIES

5.1. The Restricted Party recognises that the foregoing restrictive covenants are fair and reasonable and are necessary for the protection of the legitimate business interests of the Protected Party, and that the Protected Party would be irreparably harmed if such covenants are breached. Accordingly, the Restricted Party agrees that the said covenants may be enforced by the Protected Party through temporary and/or permanent injunctive relief under the Specific Relief Act, 1963, without prejudice to any other remedies.

5.2. Notwithstanding the foregoing, nothing in this Agreement shall prevent the Protected Party from pursuing any other remedy available to it at law or in equity, including the recovery of damages, in respect of any breach or threatened breach of the restrictive covenants by the Restricted Party.

6. REASONABLENESS OF RESTRICTIONS

The Restricted Party acknowledges and agrees that the restrictions contained in this Agreement, including those relating to duration, geographical area and scope of activity, are reasonable and necessary for the protection of the legitimate business interests of the Protected Party, and do not impose any undue hardship on the Restricted Party. The Restricted Party further acknowledges that he/she has entered into this Agreement voluntarily and with full understanding of its terms and effect, and after having had the opportunity to obtain independent legal advice.

7. ASSIGNMENT

This Agreement and the rights and obligations hereunder are personal to the Restricted Party, and the Restricted Party shall not assign, transfer or delegate any of his/her rights or obligations under this Agreement without the prior written consent of the Protected Party. The Protected Party may freely assign or transfer this Agreement and its rights and obligations hereunder to any of its affiliates, sister concerns, subsidiaries, successors or permitted assigns, and this Agreement shall be binding upon and enure to the benefit of the Parties and their respective successors and permitted assigns.

8. NO WAIVER

The failure of any Party to enforce any provision of this Agreement shall in no way be construed as a waiver of such provision, nor shall it affect the validity of this Agreement or any part thereof, or the right of either Party to enforce each and every provision in accordance with its terms.

9. SEVERABILITY AND MODIFICATION

In the event any provision of this Agreement is determined to be invalid, illegal or unenforceable by any court or other authority of competent jurisdiction, such provision shall be deemed to be amended to the minimum extent necessary, and the Parties agree to execute all documents required to evidence such amendment, so as to carry out the intent of this Agreement as far as possible and to render this Agreement enforceable in all respects as so modified, with the remaining provisions continuing in full force and effect.

10. NOTICES

All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and acknowledged by the recipient Party; (b) sent by registered post or speed post with acknowledgement due; or (c) sent by email to the address provided herein, namely the Protected Party at ________ and the Restricted Party at ________, or to such other address as a Party may notify in writing.

11. DISPUTE RESOLUTION, GOVERNING LAW AND JURISDICTION

11.1. Any dispute or difference arising out of or in relation to this Agreement shall be referred to and finally resolved by arbitration in accordance with the Arbitration and Conciliation Act, 1996, and any statutory modification or re-enactment thereof for the time being in force. The arbitration shall be conducted by a sole arbitrator mutually appointed by the Parties. Each Party shall bear its own costs, and the fees and expenses of the arbitrator shall be borne equally. The seat and venue of arbitration shall be ________, and the proceedings shall be conducted in the English language.

11.2. This Agreement shall be governed by and construed in accordance with the laws of India, and the courts at ________ shall have exclusive jurisdiction, subject to Clause 11.1.

12. LEGAL FEES AND COSTS

In the event of any legal action or proceeding to enforce any one or more provisions of this Agreement, whether at law or in equity, the prevailing Party shall be entitled to recover from the other Party all reasonable enforcement costs, including without limitation reasonable legal fees and costs, whether incurred before, during or after trial or other proceedings, including appeals.

13. STAMP DUTY

This Agreement shall be stamped in accordance with the applicable stamp duty payable under the Indian Stamp Act, 1899, and/or the relevant State Stamp Act applicable in the State of execution. The cost of stamp duty shall be borne by ________.

14. SURVIVAL OF OBLIGATIONS

Notwithstanding any other provision of this Agreement, upon the termination, expiration or completion of this Agreement, any provisions which by their nature would be expected to survive — including without limitation those relating to non-solicitation, confidentiality, trade secrets, remedies, dispute resolution and costs — shall remain in full force and effect.

15. COUNTERPARTS

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

16. ENTIRE AGREEMENT

The Parties represent and agree that they have read this Agreement and understand its terms, and that they have entered into this Agreement freely and voluntarily, without any duress or coercion from any source. This Agreement constitutes the entire understanding between the Parties on the subject matter hereof and supersedes all prior agreements, understandings and arrangements, whether oral or written.

IN WITNESS WHEREOF, the Parties hereto have set their respective hands to this Agreement on ________.

For and on behalf of the Protected Party
________

Name: ___________________

Designation: _______________

Date: _____________________

Signature: __________________

The Restricted Party
________

Name: ___________________

Date: ______________________

Signature: __________________

WITNESS-1

Name: _____________________________

Address: ___________________________

___________________________________

Signature: _________________________

WITNESS-2

Name: _____________________________

Address: ___________________________

___________________________________

Signature: _________________________