Clause guide
Non-Compete clause: meaning, risks, and what to negotiate
Restricts one party from competing with the other during or after the contract.
What it means
A non-compete can limit who you work with, what services you offer, and how freely you operate after the relationship ends.
Common risks
- • The scope may be too broad geographically or commercially.
- • The duration may last too long after termination.
- • It may restrict normal business activity beyond what is necessary.
What to check before signing
- • How long does it last?
- • What activities are restricted?
- • Is it tied to a legitimate business interest?
Negotiation ideas
- • Narrow the scope to specific customers or activities.
- • Shorten the post-term restriction period.
- • Replace it with a non-solicit or confidentiality clause if possible.
Example clause
“During the Term and for six (6) months thereafter, Contractor shall not directly provide substantially similar services to the Company’s named enterprise customers listed in Schedule A.”
Frequently asked questions
Are non-competes always enforceable?
No. Enforceability varies by jurisdiction and context, so broad non-competes can be vulnerable.
Related clauses
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