The Subcontractor Non-Compete Agreement is essential in business relationships where a main contractor needs to protect its legitimate business interests while engaging external expertise. This document becomes crucial when subcontractors gain access to sensitive information, client relationships, or specialized knowledge during their engagement. Under Malaysian law, such agreements must be carefully drafted to ensure enforceability, particularly considering the Contracts Act 1950 and Competition Act 2010. The agreement typically includes specific restrictions on geographic area, duration, and scope of prohibited activities, along with clear definitions of confidential information and trade secrets. It's particularly relevant in industries where intellectual property and client relationships are vital assets, and the document must balance the main contractor's need for protection with Malaysian legal principles regarding reasonable restraint of trade.
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1. Parties: Identification of the main contractor and subcontractor, including full legal names, registration numbers, and registered addresses
2. Background: Context of the agreement, nature of the main contractor's business, and the subcontractor's engagement
3. Definitions: Key terms used throughout the agreement, including 'Confidential Information', 'Restricted Business', 'Territory', and 'Restricted Period'
4. Scope of Non-Compete: Detailed restrictions on business activities, geographic limitations, and duration of the non-compete obligations
5. Confidentiality Obligations: Provisions regarding the protection and non-disclosure of confidential information and trade secrets
6. Duration and Term: Period during which the non-compete restrictions will apply, including any post-contract restrictions
7. Consideration: The compensation or benefit provided to the subcontractor in exchange for the non-compete obligations
8. Acknowledgments: Subcontractor's confirmation of the reasonableness of restrictions and receipt of consideration
9. Breach and Remedies: Consequences of violation and available remedies, including injunctive relief
10. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for dispute resolution
1. Non-Solicitation: Additional restrictions on soliciting employees, clients, or suppliers - used when there's significant risk of relationship interference
2. Assignment Rights: Rights to assign the agreement to another entity - included when business sale or restructuring is anticipated
3. Severability: Provisions for maintaining validity if certain clauses are found unenforceable - useful in jurisdictions with strict enforcement standards
4. Alternative Dispute Resolution: Mediation or arbitration procedures - included when parties prefer alternative dispute resolution to court proceedings
5. Third Party Rights: Rights of affiliated companies to enforce the agreement - needed when protection extends to group companies
6. Return of Materials: Obligations regarding return of confidential materials - important when significant physical or digital materials are involved
1. Schedule 1 - Restricted Territory: Detailed map or list of geographic areas where non-compete restrictions apply
2. Schedule 2 - Restricted Business Activities: Comprehensive list of specific business activities, services, or products covered by the non-compete
3. Schedule 3 - Confidential Information: Detailed categorization of confidential information and trade secrets covered by the agreement
4. Appendix A - Related Companies: List of affiliated companies protected by the non-compete provisions
5. Appendix B - Consideration Details: Detailed breakdown of any financial or other consideration provided for the non-compete obligations
Authors
Relevant legal definitions
Clauses
Relevant Industries
Information Technology
Construction
Engineering
Professional Services
Manufacturing
Healthcare
Financial Services
Telecommunications
Energy
Consulting
Research and Development
Aerospace
Defense
Relevant Teams
Legal
Procurement
Human Resources
Operations
Risk Management
Compliance
Commercial
Business Development
Contract Administration
Project Management
Relevant Roles
Legal Counsel
Contract Manager
Procurement Manager
Project Manager
Human Resources Director
Chief Operating Officer
Business Development Manager
Commercial Director
Risk Management Officer
Compliance Officer
General Manager
Operations Manager
Chief Executive Officer
Supply Chain Manager
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