A Non-Compete Agreement Between Companies is essential in business relationships where one company needs to protect its legitimate business interests from competition by another company. This document is commonly used in India during business acquisitions, joint ventures, strategic partnerships, or when sharing sensitive business information. It must be carefully drafted to comply with Indian competition law and contract law principles, ensuring restrictions are reasonable and enforceable. The agreement typically specifies prohibited activities, geographical limitations, duration of restrictions, and consequences of breach. It's particularly crucial in protecting intellectual property, trade secrets, and market position while maintaining compliance with Section 27 of the Indian Contract Act and the Competition Act, 2002.
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1. Parties: Identification of the companies entering into the agreement, including registered addresses and company registration numbers
2. Background: Context of the agreement, including the business relationship between the parties and reason for the non-compete arrangement
3. Definitions: Key terms used throughout the agreement, including 'Competitive Business', 'Restricted Territory', 'Confidential Information', etc.
4. Scope of Non-Compete: Detailed description of prohibited competitive activities and specific business areas covered
5. Duration and Territory: Time period and geographical boundaries of the non-compete restrictions
6. Consideration: The value or benefit provided in exchange for the non-compete obligations
7. Exceptions and Permitted Activities: Specific activities that are allowed despite the non-compete restrictions
8. Confidentiality Obligations: Provisions regarding the handling and protection of confidential information
9. Breach and Remedies: Consequences of violating the agreement and available legal remedies
10. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for dispute resolution
11. General Provisions: Standard clauses including severability, entire agreement, amendments, and notices
1. Related Party Obligations: Extends obligations to group companies, subsidiaries, or affiliates - used when parties are part of larger corporate groups
2. Assignment and Succession: Rules for transferring agreement rights - included when companies anticipate potential structural changes
3. Non-Solicitation: Additional restrictions on approaching employees/customers - used when talent/customer protection is crucial
4. Monitoring and Compliance: Procedures for ensuring compliance - included for complex restrictions or high-value agreements
5. Exit Provisions: Specific terms for early termination - used when parties want flexibility to end restrictions
6. Survival Clauses: Provisions that continue after agreement termination - used for sensitive business relationships
1. Schedule 1 - Restricted Business Activities: Detailed list of specific business activities, products, or services covered by the non-compete
2. Schedule 2 - Territorial Scope: Detailed maps or lists of restricted geographical areas
3. Schedule 3 - Affiliated Companies: List of related companies bound by the agreement
4. Schedule 4 - Excluded Activities: Specific activities explicitly permitted under the agreement
5. Appendix A - Compliance Certificate: Template for periodic compliance certification if required
6. Appendix B - Notice Details: Detailed contact information for formal notices under the agreement
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