The Non Compete Contract is a crucial legal instrument in Canadian business transactions and employment relationships, designed to protect legitimate business interests while respecting individual rights to employment. Typically used in executive employment, business sales, or high-level departures, these agreements must comply with provincial and federal regulations, including Ontario's Bill 27 which generally prohibits non-compete agreements except for specific circumstances. The document outlines restricted activities, geographic limitations, duration, and consequences of breach, while ensuring compliance with Canadian competition law and employment standards. It's essential when protecting trade secrets, customer relationships, or proprietary information, but must be carefully drafted to ensure enforceability under Canadian jurisdiction.
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1. Parties: Identifies and defines the parties to the agreement, including full legal names and addresses
2. Background: Establishes the context of the agreement, including the relationship between the parties and legitimate business interests being protected
3. Definitions: Defines key terms used throughout the agreement, including 'Competitive Business', 'Restricted Period', and 'Restricted Territory'
4. Scope of Non-Competition: Details the specific activities that are prohibited, ensuring reasonable limitations in terms of business scope
5. Duration of Restrictions: Specifies the time period for which the non-compete obligations will apply, ensuring reasonable temporal limits
6. Geographic Limitations: Defines the specific geographic area where the restrictions apply, with clear boundaries
7. Consideration: Specifies the consideration provided in exchange for the non-compete obligations
8. Acknowledgments: Contains party acknowledgments regarding the reasonableness of restrictions and receipt of independent legal advice
9. Exceptions and Permitted Activities: Lists specific activities that are permitted despite the general restrictions
10. Remedies: Outlines the remedies available in case of breach, including injunctive relief
11. Governing Law: Specifies that Canadian law governs the agreement and identifies the applicable province
12. Severability: Provides that if any provision is found invalid, the remainder of the agreement remains in effect
13. General Provisions: Standard boilerplate provisions including entire agreement, amendments, and notices
1. Non-Solicitation Provisions: Additional restrictions on soliciting employees, customers, or suppliers - used when broader protection is needed
2. Confidentiality Obligations: Detailed confidentiality provisions - included when not covered in a separate agreement
3. Return of Property: Requirements for returning company property - relevant for employment-related non-competes
4. Assignment Rights: Rights to assign the agreement - important in corporate transactions
5. Survival: Specifies which provisions survive termination - used in more complex agreements
6. Garden Leave: Provisions for paid non-compete period - relevant for executive agreements
7. Compliance with Bill 27: Special provisions for Ontario-based agreements addressing executive exemptions
1. Schedule A - Restricted Territory: Detailed map or description of the geographic area covered by restrictions
2. Schedule B - Competitive Business Description: Detailed description of the business activities considered competitive
3. Schedule C - Consideration Details: Breakdown of any financial consideration or benefits provided
4. Appendix 1 - Excluded Activities: List of specific activities excluded from the non-compete restrictions
5. Appendix 2 - Key Customers/Clients: List of specific customers/clients covered by the restrictions, if applicable
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