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Non Compete Non Solicitation Agreement Template for South Africa

This document is a legally binding agreement under South African law that restricts one party from competing with another party's business interests and/or soliciting their employees, clients, or suppliers. The agreement must comply with South African constitutional principles and common law requirements, ensuring restrictions are reasonable in terms of duration, geographical area, and scope. It includes specific provisions detailing the nature of restrictions, their temporal and geographical limits, and must be drafted to balance the protection of legitimate business interests against the constitutional right to freely choose one's trade, occupation, or profession.

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What is a Non Compete Non Solicitation Agreement?

A Non-Compete Non-Solicitation Agreement is essential in South African business relationships where one party needs to protect their legitimate business interests from competition or solicitation by another party. This document is commonly used in employment relationships, business sales, or partnership dissolutions. It must be carefully drafted to comply with South African constitutional principles and common law, which require such restrictions to be reasonable in duration, geographical scope, and business activities covered. The agreement typically includes detailed provisions about restricted activities, temporal and geographical limitations, and consequences of breach. It's particularly important to note that South African courts will only enforce these agreements if they protect legitimate business interests and don't unfairly restrict trade.

What sections should be included in a Non Compete Non Solicitation Agreement?

1. Parties: Identifies and defines the parties to the agreement, including their full legal names, registration numbers (if companies), and physical addresses

2. Background: Sets out the context of the agreement, including the relationship between the parties and the legitimate business interests being protected

3. Definitions and Interpretation: Defines key terms used in the agreement, including 'Confidential Information', 'Restricted Business', 'Territory', and 'Restricted Period'

4. Non-Compete Obligations: Details the specific restrictions on competing activities, including scope, duration, and geographical limitations

5. Non-Solicitation Obligations: Specifies restrictions on soliciting employees, clients, customers, or suppliers of the protected business

6. Duration and Territory: Clearly states the time period and geographical area where the restrictions apply

7. Acknowledgments: Contains statements by the restricted party acknowledging the reasonableness of restrictions and receipt of consideration

8. Severability: Provides for the survival of remaining provisions if any provision is found to be unenforceable

9. Breach and Remedies: Outlines the consequences of breach and available remedies, including injunctive relief

10. General Provisions: Standard legal clauses including governing law, jurisdiction, entire agreement, and amendment provisions

What sections are optional to include in a Non Compete Non Solicitation Agreement?

1. Consideration: Required if the agreement is standalone and not part of employment terms, detailing the payment or benefit provided in exchange for the restrictions

2. Garden Leave: Include when the agreement covers the period immediately following employment termination

3. Confidentiality Obligations: Include if confidentiality provisions are not covered in a separate agreement

4. Post-Employment Cooperation: Include when ongoing cooperation is required for transition or knowledge transfer

5. Independent Legal Advice: Include when there's a need to explicitly confirm that the restricted party had the opportunity to seek independent legal advice

6. Survival of Obligations: Include when certain obligations need to explicitly survive the termination of related agreements

What schedules should be included in a Non Compete Non Solicitation Agreement?

1. Schedule 1: Restricted Territory: Detailed description or map of the geographical area where restrictions apply

2. Schedule 2: Restricted Clients/Customers: List of specific clients or customers covered by non-solicitation provisions

3. Schedule 3: Restricted Business Activities: Detailed description of specific business activities that are restricted

4. Schedule 4: Consideration Details: If applicable, detailed breakdown of consideration or payment terms

5. Appendix A: Acknowledgment Form: Form for the restricted party to sign acknowledging understanding and acceptance of terms

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

South Africa

Publisher

Genie AI

Cost

Free to use

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